There doesn't seem to be much meat to this article. Real GDP per capita growth has been strong. Public sector debt is just another form of currency and its creation is driven by private sector demand to hold yen.
To be quite honest, I don't think this is one of my better pieces.
I am curious to learn where you got those real GDP growth numbers from though. The World Bank (https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=JP) shows that GDP per capita has been growing since '15 but is still far below where it was in 1995/2012. Also - I wouldn't give too much credit to the growth of a "per capita" number. Japan loses over half a million people per year.
Lastly, you are correct that public sector debt in itself isn't anything detrimental to an economy. The concern is that public sector debt has swelled so much without any influence on the trajectory of inflation or the economy. It's evident that Japan will continue to push the limits of their deficit.
I appreciate the engagement! Thank you for reading.
Also I don't see how producing the same value of goods and services with half a million less people each year is any different to producing slightly more goods and services but having to distribution them among a larger population. In both cases the individual enjoys the same level of consumption.
In regards to the deficit, I recommend reading some material on Chartalism / MMT:
Excessive deficits (meaning deficits in excess of the private sectors desire to hold yen balances) are constrained / demonstrated by the appearance of inflation. Since inflation has been extremely low since the 1990s, and often negative (especially when looking at the GDP deflator), Japan is actually one of the countries with the largest capacity to cut taxes / raise spending.
I found this concept difficult to get my head around when I first stumbled upon it, but the more I ran it through my head the more I realised that a lot of talk about deficits in fiat currencies was really missing the core issue, and often emotionally charged and couched in the language of morality.
There doesn't seem to be much meat to this article. Real GDP per capita growth has been strong. Public sector debt is just another form of currency and its creation is driven by private sector demand to hold yen.
To be quite honest, I don't think this is one of my better pieces.
I am curious to learn where you got those real GDP growth numbers from though. The World Bank (https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=JP) shows that GDP per capita has been growing since '15 but is still far below where it was in 1995/2012. Also - I wouldn't give too much credit to the growth of a "per capita" number. Japan loses over half a million people per year.
Lastly, you are correct that public sector debt in itself isn't anything detrimental to an economy. The concern is that public sector debt has swelled so much without any influence on the trajectory of inflation or the economy. It's evident that Japan will continue to push the limits of their deficit.
I appreciate the engagement! Thank you for reading.
https://www.yardeni.com/pub/japanpercap.pdf
Looks good to me.
Also I don't see how producing the same value of goods and services with half a million less people each year is any different to producing slightly more goods and services but having to distribution them among a larger population. In both cases the individual enjoys the same level of consumption.
In regards to the deficit, I recommend reading some material on Chartalism / MMT:
https://en.wikipedia.org/wiki/Chartalism
https://en.wikipedia.org/wiki/Modern_Monetary_Theory
Excessive deficits (meaning deficits in excess of the private sectors desire to hold yen balances) are constrained / demonstrated by the appearance of inflation. Since inflation has been extremely low since the 1990s, and often negative (especially when looking at the GDP deflator), Japan is actually one of the countries with the largest capacity to cut taxes / raise spending.
I found this concept difficult to get my head around when I first stumbled upon it, but the more I ran it through my head the more I realised that a lot of talk about deficits in fiat currencies was really missing the core issue, and often emotionally charged and couched in the language of morality.