[Bosnjak]

Here is an interessting world ranking of Public Debts.


Japan (nr. 1) has 225.80% of the GDP in public debts, whereas Greece (Nr. 5) 144.00%.

Source: CIA factbook https://www.cia.gov/library/publication ... ame=Bosnia and Herzegovina&countryCode=bk&regionCode=eur&rank=77#bk



Why has Greece such troubles and Japan not?

[Wolfman]

The folks who own Japan's debt isn't demanding their money back is the most fundamental reason. Ultimately, debt doesn't matter if the debt owner never wants their money.

Also, I think most of Greece's debt is owned by foreign companies (mostly US based banks), where as most of Japans debt is owned by it's own people. Japanese culture is also built around giving up your individualism for the greater good of society, and the rioting in Greece should show you that this not the case there.

[Kman]

According to the economist Peter Schiff the Japan situation is different since the debt owed by Japan is owed to its own people while the debt owed by Greece is owed to foreigners, overall Japan is a net creditor, not a debtor.

[Kman]

[Mod Note: Bickering between Kman and Wolfman removed]

Because that [the fact that Japan is a net creditor] barely matters.

It doesnt matter that if all debts were repaid Japan would end up richer than it is now and not desperately poor like Greece?

[Wolfman]

Even with it's debt, Greece is not desperately poor. It's a fairly wealthy first world country, not some collapsing third world state.

[Stormsmith]

I think most of Greece's debt is owned by foreign companies (mostly US based banks), where as most of Japans debt is owned by it's own people. Japanese culture is also built around giving up your individualism for the greater good of society, and the rioting in Greece should show you that this not the case there.

This is key.

The interest a country pays to a second country is lost to the first country. The nation's overall wealth is depleted.

When countries who need capital depend on its own citizens to chip in through the purchase of bonds or bills, the interest paid is returned to the citizen and remains in the national economy.

This is why washington has raided the national trust funds. Why Bush didn't try to finance some of the Afghan-Iraq wars with war Bonds I could not say.

[eugenekop]

It doesnt matter that if all debts were repaid Japan would end up richer than it is now and not desperately poor like Greece?

They won't get richer, the vast majority of Japanese will get poorer, and significantly. Only those Japanese who own government bonds will become richer. For the vast majority of the population it doesn't matter whether the debt is payed to a minority of Japenese or to American banks, it is still money that goes away and will require a dramatic decrease in standard of living.

[Rugoz]

I wonder why the CIA figure for the US is 58.90 while the IMF has it at 92.7. Don't we all love the CIA?

[Stormsmith]

They won't get richer, the vast majority of Japanese will get poorer, and significantly.

That depends on:
1. the tax system. If the wealthy are taxed higher for capital gains, then the debt shifts away from the lower or even non-taxed Japanesse. If it affects the paycheque, the middle class will be hit harder than they would if the gains were focussed on cap gains

2. how the money was spent. Investing in housing for the poor would improve the lives of the poorer people; buying weaponry and stockpiling it until it passed it's best by date would be less useful

[Kman]

Im pretty sure the debt owed by the japanese government wont be repaid so these bonds just basicly represent taxes that japanese people have paid in the past which they wont get back.

Edit: and even if these bonds were paid off the money for the repayment would have to come from the japanese people, so it would be a payment from japanese people to japanese people (it would still ofc transfer wealth from certain segments to other segments of society within Japan).

[Wolfman]

I wonder why the CIA figure for the US is 58.90 while the IMF has it at 92.7. Don't we all love the CIA?

IMF is probably counting total public debt, while the CIA is probably going on public debt owned by Americans.

That depends on:
1. the tax system. If the wealthy are taxed higher for capital gains, then the debt shifts away from the lower or even non-taxed Japanesse. If it affects the paycheque, the middle class will be hit harder than they would if the gains were focussed on cap gains

Japan has a progressive tax system, as I recall, so the money would flow down.

2. how the money was spent. Investing in housing for the poor would improve the lives of the poorer people; buying weaponry and stockpiling it until it passed it's best by date would be less useful

We're talking about Japan here, they officially do not have a military.

[Salohcin]

From the CIA fact-book page:

This entry records the cumulative total of all government borrowings less repayments that are denominated in a country's home currency. Public debt should not be confused with external debt, which reflects the foreign currency liabilities of both the private and public sector and must be financed out of foreign exchange earnings.

I'm guessing that the US debt looks smaller because the debt is most denominated in US dollars.

I'm kind of surprised that japan's debt isn't denominated in yen though. Maybe because the yen of deflation they have moved government bonds to $US in order to give a lower return without quoting a lower % return, I haven't really looked into this though, just guessing.

[Stormsmith]

if these bonds were paid off the money for the repayment would have to come from the japanese people, so it would be a payment from japanese people to japanese people (it would still ofc transfer wealth from certain segments to other segments of society within Japan).

Yes but it remains in circultion, and can be used to buy and sell stuff, keeping shops, restaraunts, theaters, DIY centes etc ticking along, paying wages and taxes etc. Once its gone to China or where ever, that's it. For those yen or dollars, its just gone and is not doing anyone any good anymore.

We're talking about Japan here, they officially do not have a military.

Thank you for that, and you're right about income tax being graduated. the low end is 5%, the upper end 40%; sales and property tax rates are constant.

My point, however was that there are two sides to the ledger. Assets and debits. Some assets do more public good, enrich lives more than others. Some of that spending can target poorer people and enrich their lives more than the 5% tax they pay. Some spending is just useless. I'd include interest to service a foreign loan.

[Daktoria]

I wonder why the CIA figure for the US is 58.90 while the IMF has it at 92.7. Don't we all love the CIA?

The Federal Reserve owns a lot of Treasury securities, so there's no reason to account for government held government debt. Technically speaking, the government could simply retire those securities if it wanted to, but then it'd lose its ability to handle monetary policy.

[dilpill]

Yeah, the US Government holds a lot of its own debt. In addition to the securities held by the Fed, the Social Security and Medicare trust funds hold debt worth something like 20% of our GDP. Almost all of the interest payments on that debt goes back to the Treasury (for the Fed) or back into the trust funds. The CIA must be counting only publicly held debt whereas the IMF counts gross debt.

[Stormsmith]

Yeah, the US Government holds a lot of its own debt. In addition to the securities held by the Fed, the Social Security and Medicare trust funds hold debt worth something like 20% of our GDP. Almost all of the interest payments on that debt goes back to the Treasury (for the Fed) or back into the trust funds. The CIA must be counting only publicly held debt whereas the IMF counts gross debt.

Huh. Japan owns 93% of its own debt (that's part of the role of the bank of Japan, according to Forbes'). I wonder if their debt to GDP is calculated differently by the CIA.

[Bosnjak]

does anybody habe an IMF ranking of countries?

[Rei Murasame]

We're talking about Japan here, they officially do not have a military.

The money is spent on lots of infrastructure, but I think that if you are going to argue that Japan "does not officially have a military", then that is something which would have to involve a whole lot of winking and nudging. Now, more than ever, and in more visible ways.

[Wolfman]

^ Infrastructure developments virtually always benefit an economy. I also do not consider the Japanese Defense Forces to be an Army in the traditional sense. They are certainly not as easily manipulated for the benefit of the wealthy as the Military of the US.

[Rei Murasame]

Oh, if that's what you mean then I agree with you.

Infrastructure developments virtually always benefit an economy.

I agree there generally.

They are certainly not as easily manipulated for the benefit of the wealthy as the Military of the US.

I agree there as well. I think that the misunderstanding arose from me having a different interpretation of what "Army in the traditional sense" actually meant. If you're looking at it through the eyes of USA's MIC then yes, JSDF is a bit different.