Reply #8: how did Japan get to 200% debt to GDP? [View All]

Oh, that's right, stimulus after stimulus, and having the BOJ hold the interest rate down next to zero. How many years have they been trying (unsuccessfully) to stimulate their economy in this manner?
Their debt service costs have doubled. The biggest difference, which you left out, is that their society has a much better saving propensity than ours. If you borrow money from your wife to cover the household bills, is that the same as borrowing from the neighbor? Paying your wife back, even with interest, is going to 'stay in the family', but if you're sending that money back across the street with interest, it's a different matter. It's particularly dangerous when you're constantly revolving the debt to the tune of trillions of dollars, and today's low rates could vanish next year. That's when you 'go Greece', when the rest of the world says, 'we'd like a little more risk premium'. The only way to counter that is to crank up the printing presses. Hello stagflation, if you're lucky...


"also i will say the CBO estimate is based on a projection of the baby boomers doing an en mass retirement when they reach age 65-67...which is probably not goin to happen. Many baby boomers see themselves working into the early 70's"

Actually, because so many payrolls have been lost in this recession, more of them are opting for early retirement than expected because they can't find work. That's partly why Social Security is already running deficits years ahead of the projections.
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