>In the wilderness of mirrors which is bourgeois economics, how to explain
>apparent paradoxes like the one Baker describes, is an insoluble problem. On
>the one hand, Japan has huge surpluses on its external accounts and huge
>overseas dollar holdings. On the other hand we are constantly told, even by
>the Japanese themselves, that the whole economy is about to collapse under the
>weight of a mountain of debt.
This is very easy to explain with bourgeois economics: too much saving and not
enough spending on the back of a broken speculative bubble. We would call this
overaccumulation but this is only another way to talk about underconsumption.
>Japanese public debt was recently downgraded by Standard &
>Poor's to junk-bond status.
Junk status??? Really?
>Is Japan really about to go down the tubes, like
>Russia
No.
>This article reports on a comment by Japan's
>finance minister, that "Japan's public finances
>are very near collapse."
This is a routinely used political trick that neoliberals and other fans of "small
states" like very much. People are only paying attention to it because of the
prevailing gloomy mood.
>At one point the article asserts that Japan has
>the highest debt in the world at 130 percent of
>its GDP. Most of this debt is attributable to
>bookkeeping peculiarities, which would not be
>counted as debt elsewhere. Its publicly held debt
>is approximately 40 percent of GDP, almost the
>same as the 39.8 percent figure for the United
>States at the end of 1999.
Interesting. The downgrades would be unwarranted then. You see Rob? Contrary
to what you said, the financial crowd is not clever enough to see through the
accounting smoke. They take fishy numbers at face value and one important factor
in the US bubble is fishy accounting.
>Deficit-spending on public works schemes has also been tried,
>as a way of siphoning off surplus capital, equally unsuccessfully. The only
>other Keynesian option left would seem to be the one tried by Hitler, and his
>economics and finance lieutenants, Speer and Schachtmann, in the 1930s, copied
>then by Japan: put simply, a massive rearmament programme based on autarky
>and temporary withdrawal from the world market.
Nonsense. Deficit-spending works. It only has not been tried hard enough, for trying
hard enough would mean not borrowing but printing money. This is the keynesian
recipe. BTW, deficits needn't be spent on public works. The state can also invest in
energy, research, education, foreign aid, or whatever. It could even nationalize
troubled sectors. The specific advantage of war preparations as an economic
stimulus is that chauvinistic capitalists are willing to lose money on war
preparations but not on socially productive ventures.
BTW, Japan doesn't need autarky and as far as I can see it wouldn't help.
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