... are debt and demographics.
The Wall Street Journal (WSJ) has become practically unreadable. Mouth-foamers from our race-obsessed generation of college graduates have now infested that publication and the quality of writing has decreased as their fixation on der Volk has increased. Oh well. "So bröckelt der Keks, weil er von weißen Rassisten gebacken wurde," as they no doubt say in J-school these days.
Fortunately, the Japan Times is here to save the day. Their articles, at least in their business and economics section, are written clearly and work hard to provide the layman with explanations of what is happening. Here are a couple I perused this morning.
They have a charming euphemism for deficit spending. It's called an "extra budget*." It sounds like you would make a budget to account for your income and then make two more so you can spend that income three times. Which is about what it is.
The government needs to compile a third extra budget for the current fiscal year ending March to shore up an economy hammered by the COVID-19 pandemic, economists have said in a poll.
Nearly three quarters of economists polled said the government should spend up to ¥10 trillion ($94.95 billion) under the extra budget to help the world's third-largest economy recover after a record contraction in the second quarter.
The rest said the government should spend even more.
And why not spend more when you can fall back on Modern Monetary Theory (MMT)?
KYOTO – Stephanie Kelton, a professor at the State University of New York at Stony Brook, is a leading advocate for Modern Monetary Theory (MMT) who is known for her seemingly radical argument that as long as a government can pay back its debt in the nation’s own currency, there are no limits to the fiscal deficits that it can incur. She stirred up a controversy when she cited Japan’s situation as evidence to prove her theory...
Yay! We're winning! Err ...
The (Japanese) postwar baby boomer generation, now in its early 70s, will soon join the ranks of the “latter-stage” elderly who are 75 or older and start tapping into their savings to cover their expenses. The trend of excess fund in the private corporate sector may also change over the long term. In that case, government debts that have piled up in massive numbers may become unsustainable with domestic savings alone. If the conditions change in such ways, JGB prices might crash, sending the bond yields shooting up.
What would be particularly serious would be a collapse of the inflation-adjusted, real-term value of the JGBs, in which case the private sectors that hold the government bonds would suffer enormous losses.
Not to worry, women are entering the workforce in huge numbers so they can earn the income the government needs to tax.
Japanese households’ disposable income has been increasing since 2015. However, the scale of the increase has been moderate mainly because a rise in spousal income driven by greater female labor force participation has been partially offset by declining working hours as a result of the growing number of part-time jobs. Higher tax payments and social security contributions have also exerted downward pressure on disposable income, which today remains below the 2000 level.
More women working means fewer babies. That's OK, so long as you're not one of the "latter-stage" elderly when the population starts dropping. As we recall from a few paragraphs ago, there are dark rumors spreading about something called "a collapse of the inflation-adjusted, real-term value of the JGBs." Uh oh.
All of this is to say that as the current tsunami of political ads and the intellectual infants in our news media focus on Twitter and Orange Man Bad, we're cruising down the same road as Japan, only a decade or so behind them. While our Ivy-League geniuses roll out easily-disproven, childish concepts like MMT, we've set in motion forces that dwarf the Green Nude Eel and Social Reich Justice.
It's a good thing we no longer are allowed to read racist colonialist racist white racists like Kipling.
In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."
Meanwhile, it's nice to be a bit farther upstream than Japan from the 80' cataract. We're still doing alright.
* - Extra Budget is to Japanese government spenders as Second Breakfast is to hobbits.