The IMF estimates Japan’s debt to be about 240 percent of GDP, but there is an anti-austerity movement in the country that says it is time to borrow more.
In Japan, a country with a public debt of $10 trillion – twice its GDP – some believe that the best policy is to borrow more
Disconcerting facts. The arguments for increased deficit spending in the world’s third largest economy are based on disconcerting facts. Japan issues 10-year government bonds at a negative interest rate, which means it is paid by its lenders. Thanks in part to a long period of low-interest rates, only about 5% of government revenue – central and local – is allocated to interest payments. Inflation is also very low.
Conventional economics argues that high levels of government borrowing lead to higher interest rates, higher interest charges, and higher inflation.
“There are a lot of people in Japan and around the world who are suffering from the results of tight budgets,” said Akiko Oishi, one of dozens of candidates backed by an anti-austerity group in local elections in Japan on April 7. Ms. Oishi, who is campaigning in a yellow vest in Osaka for a seat in parliament, is calling for more than $100 billion in new national spending to improve social welfare, including better pay for older workers.
Japanese finance hawks agree that, unlike others who see the country as a new Greece, …