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NY Times Puff Piece On Japan Covers Up A Sham

An opinion piece in Sunday’s New York times does the rah rah for the apparent successes of the Japanese economy over the past 20 years.

DESPITE some small signs of optimism about the United States economy, unemployment is still high, and the country seems stalled.

Time and again, Americans are told to look to Japan as a warning of what the country might become if the right path is not followed, although there is intense disagreement about what that path might be. Here, for instance, is how the CNN analyst David Gergen has described Japan: “It’s now a very demoralized country and it has really been set back.”

But that presentation of Japan is a myth. By many measures, the Japanese economy has done very well during the so-called lost decades, which started with a stock market crash in January 1990. By some of the most important measures, it has done a lot better than the United States.

The Myth of Japan’s Failure

What the author ignores is the real reason behind this patina of success– the massive, unprecedented increase in the country’s public debt. According to the IMF, Japan’s debt to GDP ratio of 220% was the largest in the world in 2010, ahead of such economic powerhouses as St. Kitts and Nevis, Eritrea, Jamaica, Greece, Lebanon, and Italy. Japan piled even more debt on top of that in 2011, especially in the aftermath of Fukushima.

I’m not sure what the Times’s purpose of promoting such balderdash is. But Kyle Bass has it right. The collapse of this sham is imminent. The Japan discussion starts at 33:40.

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1 Comment

  1. Cody Penn Dent

    I can only assume that this a “placed piece” to lay the groundwork for a policy narrative that promotes perpetual printing. Anyone who reads folks like Matt Yglasias has been getting a steady diet of “there is nothing wrong with borrow/print to boost aggregate demand.”

    All quite ironic – Remember in the 80s when Japan, Inc was kicking the US’ butt and they lectured Americans on the need to save money and be more frugal?

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