Japan is Experiencing our Future

http://fortune.com/2015/02/26/japan-economic-time-bomb/?xid=gn_editorspicks&google_editors_picks=true

Nevertheless,the situation in Japan,the world’s third largest economy,will have a greater impact on the global economy in the years to come than Greece ever will. And for aging Western Democracies like the U.S.,watchingwhat unfolds in Japan may be like looking into a crystalball of our own economic future.

Takatoshi Ito,an economist at Columbia’s School of International& Public Affairs,argued at a panel discussion on Monday that unless the Japanese government can raise its sales tax to north of 15 % ,from its current 8 % ,Japan’s economy will suffer a fiscal crisis sometime between 20 21and 20 23 .That’s because as Japan’s population continues to age,its famously high savings rate will have to fall,and the Japanese public will no longer be able to absorbthe large amount of debt the government is assuming.

Unlike Greece, the Japanese government can print as many yen as it wants to pay its debts—debts that are largely owned by the government,Japanese banks,and citizens.So there’s no reason Japan would have to default on its debt. But all that money printing,argued Ito, will lead to an inflation crisis and aserious decline in the Japanese standard of living.

Ito’s co-panelist, Japan scholarGerald Curtis,doesn’t believe that the Japanese government will raise the sales tax to 15 % any time soon. Prime Minister Shinzo Abe’s decision to delay asales tax increase from 8% to 10 % until2 01 7is indicative of the government’s inability to force such painful policies on the public. “It’s very hard for me to see how we get from here to there,” said Curtis. If BothIto and Curtis are right, that means we’re just afew short years away from a fiscal crisis in Japan.

Only be bad for for those not in government.

*****CHUCKLE*****

https://www.youtube.com/watch?v=2TxYNYpicXM

I've just read a story about Venezuela, their middle class is disintegrating along with the wealthy due to the governments laser focus on shifting money to the poor. There has to be a middle ground where poor folks have what they need but when the scales tip too far the country doesn't have the necessary revenue to be functional. It's Obamas dream.......

nochain wrote:

I've just read a story about Venezuela, their middle class is disintegrating along with the wealthy due to the governments laser focus on shifting money to the poor. There has to be a middle ground where poor folks have what they need but when the scales tip too far the country doesn't have the necessary revenue to be functional. It's Obamas dream.......

Then perhaps he should go there and lead them....A nation so rich in a natural resource and yet the decades of greed...corruption and socialism keeps citizens in poverty...You're correct the cowh must have used Venezuela as his model for shrinking the upper and middle classes...Understand how those leaders continue to be elected and re-elected but who'd have thought so many here could/would have been so foolish....