The WSJ Didn't Hear About the Collapse of Japan's Bubbles
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Sunday, 29 January 2012 22:05 |
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It is apparently hard to get information about Japan's economy at the Wall Street Journal. That is what readers must think after seeing an article about Japan's debt that say:
"after decades of undisciplined spending, government debts are more than twice the size of the nation's annual economic output."
Of course there were not decades "decades of undisciplined spending." In fact Japan was running large surpluses through the 80s and into the 90s. If the WSJ had access to IMF data (it's free folks), they would know this. It only began running deficits in response to the downturn following the collapse of the bubble.
Arguably the deficits were too small, not too large, since they did not get the economy back to full employment and did not prevent prices from falling. If there was any "undisciplined spending," it was by the banks that pumped up the stock and housing bubbles in the 80s.
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But now that the yen is at record high levels against the dollar, despite Japan's efforts to hold down its value, Japan's export industries are being "hollowed out" as factories move to the U.S., China and other countries.
Japan's latest response to this crisis is to raise the value added (sales) tax to reduce domestic consumption further.
http://www.yomiuri.co.jp/dy/national/T120124006289.htm
Obviously, the U.S. is not the only country with stupid politicians. Only the Chinese Commies seem to understand Keynesian principles.