Why Japanese national debt is so high? 10 points for the best help.?

Question

Japan has large economy and big market. How come Japan is in so much debt?

Please look at the data. I need thoughtful advice. Thank you

http://en.wikipedia.org/wiki/List_of_countries_by_public_debt

Answer 1

I believe it may stem from a current consumer culture of spending on social activity and consumer goods. For example, most people as I understand it only rent property as there is a prominent risk of earthquakes it doesnt make huge sense to invest in property if there is a risk of it tumbling down. Add to that the element of difficulty in trying to insure the building. Also foreign nationals and some young people may also find it difficult to obtain long term financing for say a mortgage to buy a house. Instead there is a wealth of short term lending instant lending on credit cards and personal loans. Then add to that, the consumer market is filled with a strong market of electrical goods such as phones, ipods and latest technology and with the jdm automotive sector, the national testing requirements for roadworthyness mean that it is cheaper to buy a new car every three years than maintain an old one. Plus up until recently Japan has had virtually no interest rates.  (By the way call me lazy, I didnt look at the data but hey I still posted my thoughts) ;-)  Time for some gyoza!

Answer 2

The government of LDP has constructed useless highways and roads, useless dams, useless bridges ( Kojima-Sakaide, Onomichi-Imabari), and other countless constructions.

The politicians of LDP conspire with constructors called Dokenya土建屋, and they corrupted. They lined their own pockets by exploiting national finance.

More important point is the truth that their useless projects had destroyed beautiful nature and historical scenery, and they slaughtered wild animals and plants. Ex minister of agriculture Matsuoka had killed raccoon dogs, foxes and bears by construction of roads in forests. Dams of Isahaya and Nagaragawa are exterminating fishes.

Answer 3

what i heard is that because the japanese like to spen cash more so than use credit cards so because of that like interest rates or something is too low and they are on the verge of a crisis and there trying to make people use more credit I heard that on a news report some time ago how the japanese prefer cash to credit

Answer 4

It is a little strange to hear Amerian people ask that reason.

Basicaly, Americans taught Japanese goverment to spend more money if the goverment have enough money and have to borrow it.

It's a aggregate demand management of Keynes's economics.

http://en.wikipedia.org/wiki/Keynesian_e...

http://en.wikipedia.org/wiki/Monetary_po...

Japanese government was "a good student" of the U.S. after the WW2 not only on politics but also on Keynesian approach of stimulating the economy.

In that days, Keynes's theory of effective demand was becoming popular because of the economical victory on the Great Depression from 1929, and the U.S. becoming the center of Ecomonics (not only economy).

Japanese economy was totally destroyed by boming of U.S, but U.S. wanted to recover Japanese ecomony in the new harmony of the world, so called "the cold war" agaist Soviet Union.

Then, Japan took a Keynesian style ecomonical policy and suceed reconstruction of its industory very quickly, as U.S. expect.

This is a first, lucky story of Japanese debt after WW2, may be 1950-1970.

(before WW2, both politicians and economist are not mature enohgh to take Keynes-style policy, and Japan sometimes went to depression because of the balanced fiscal policy.)

Everything has bad side.

The second story from around 1970 is not so happy.

Because Japanese lobbyists of constructors got tast for constructions by govermental bugdet and they got more and more power with perticular politicians, nobody could stop spending huge money on constructions of many roads,  buildings, ports, earth filling of bay area, even Japan already .

During 1970-1990 our government loose the budget flexibility and getting into cronic budget deficit.

Finally, Japan got critical depression from 1990 and national debt increased rappidly.

For both japanese government and personal division that have been familier to the total demand control policy, there is no choice to increse national dept.

This is main reason why the ratio of Japanese national dept is so high compered with other countries.

please see the gragh of Japanese national bonds that are over half of the national debt.

http://ja.wikipedia.org/wiki/%E5%9B%BD%E...

Anyway, Keynes-style economics is like a kind of bible for Japanese interectual people who knows economics.

Although main reason is a policy of this 20 years, but it's root is Keynesian policy and it's operation Japan have been taken.

Answer 5

d**n politicians and silly people.

Answer 6

It's the huge public works projects that suck up the money. The construction lobby has a lot of pull in Japan so that's why they are constantly covering everything in concrete. Hence the tetra-pods on the beaches and the tunnel under Tokyo bay, etc. The Japanese space program also sucks up a lot of money. It costs NASDA twice as much as NASA to put up a satellite.

Answer 7

External debt (debt to foreign countries) and national debt (government debt to its own nation) are totally different two things.

Unlike the U.S. (the world largest debter nation), Japan's external debt and the ratio to its GDP is nominal.

http://www.nationmaster.com/graph/eco_de...

Japan's foreign reserve is the second largest in the world.

http://en.wikipedia.org/wiki/Foreign_exc...

Japan's economy is still one of the largest in the world.

Talking about the national debt (or public debt to its own nation), there is nothing to do with the nation's power in relation to the world economy. Because the money borrowed from its nation is to spend for its national economy from which the government can expect more tax revenue.

In other words, public debt by the government is a system by which the whole nation supports the whole nation  reciprocally. All the members of your family is supporting your family, so to speak. As long as your family members work hard to make the ends meet, your family can survive.

In case of the U.S., the primary balance is better than that of Japan and its public debt is smaller; however, huge amount of its external debt, due partly to the wars over tha last two decades, is a serious problem. In addition, you need to keep the fact in mind that extensive portion of the U.S. national budget is born by China and Japan.