"The interest rate on Japanese 10-year government bonds is currently less than 1% - making it the lowest in the world despite very high national debt and annual budget deficits. In fact, the debt of the public sector in Japan currently amounts to about 230% of GDP, the total debt is more than 500%. Thus, the debt ratio of the public area is higher than that of Greece (175% of GDP) and nearly twice as high as that of Italy (125%). The annual budget deficit is nearly 10% of GDP, higher than in any country in the euro zone. With slow economic growth, the deficit leads to an annual increase of the ratio of debt by ten percentage points.
[...] The hope will not be fulfilled that low interest rates and massive stimulus packages will lead the Japanese economy out of stagnation. The growth rates will remain low after a brief flourish. The price for the gradual weakening of the currency and the gain of excess capacity in the Japanese corporate sector is paid in the form of falling real income of the Japanese citizens. The zero interest rate policy which overrides the allocation function of interest increases the risk that structural distortions of the capital stock will be cemented. With the downward trend in interest rates there will be no revitalization of capital accumulation in Japan." full: http://www.sozialismus.de/nc/archiv/kommentare_analysen/detail/artikel/mit-niedrigzinsen-und-oeffentlichen-investitionen-aus-der-deflation/ > Max Sawicky wrote: > > I'd go further and consider the net interest paid to GDP ratio, if we're in > this context. > > Then there is the uber-Keynes view, to which I've become increasingly > sympathetic, that these ratios don't matter at all. (Note Japan's debt/GDP > ratio is 2.3 (230%) and while they have not been the greatest economy they are > not blowing up.) > > > > > On Sat, Mar 23, 2013 at 11:11 AM, Tom Walker wrote: > > > Thanks Julio, it's good to know somebody actually reads these ravings. > > > As everyone with an ounce of understanding of economics knows, it's not > > > the nominal amount of debt that matters, it's the debt to GDP ratio. > > > More GDP means more revenue to service debt. > > > > But what if the Pope and the Cardinals don't believe in God? Could they > > admit it and still retain their hold over their flock (and the assets of the > > Vatican)? I mean what if the ruling class doesn't believe in the GDP and > > knows damn well that to admit the Emperor has no clothes would be to forfeit > > their hegemony and very possibly their necks. > > > > It seems to me that if our almighty and merciful rulers lost faith in > > GDP, they would go on a binge of asinine "austerity" and deflationary "debt > > reduction" all the while hypocritically insisting on the sanctity of GDP and > > holy growth. This would enable them to rake in as many chips as they can > > before the deluge. > > > > Suddenly, if you look differently at the GDP end of the debt to GDP ratio > > and don't assume liars believe their own lies, the austerity swindle makes a > > lot more sense. > > > > On Sat, Mar 23, 2013 at 3:22 AM, Julio Huato wrote: > > > > > > > For more immediate purposes, there's still the question of > > > > > whether to > > > use these measures or not. I think it depends. I admit that, in > > > principle, there may be cases in which GDP measures are not only > > > potentially misleading, but that it may in fact be impossible to > > > determine a proper way to correct for the bias. Let alone the size, > > > the algebraic sign of the bias may flip, so that using GDP measures > > > or > > > using "random" numbers may yield the same results. That said, I > > > doubt > > > it seriously that this is the case in general. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
