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07-20-2011, 10:55 PM | #1 |
Doctor Wtf
Join Date: Oct 2007
Location: Badelaide, Baustralia
Posts: 12,861
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July 21, 2011: Public debt and the elephant in the room
Here is a graph that appeared in the media recently. I'll show two versions.
The horizontal axis shows total government debt. The vertical axis shows last year's budget defecit, i.e. how fast debt is growing. These are all done as a percentage of GDP so it fairly accurately represents each nation's ability to deal with this debt. The bottom left corner is good - low debt, small defecit. The top right is bad. Here is the trimmed version, without the elephant. So there's the US - high deficit, serious total debt; the European debt - notice Greece with its very large total debt and serious defecit. There is China looking pretty good (although even here, there are questions) and Australia, so far kept healthy by China's demand for minerals. Here's the elephant: Japan is still the world's 3rd largest economy, has the most aged population, a shrinking labour-force, and minimal natural resources. Yet, no-one is even talking about this! You work it out. Me no like.
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Shut up and hug. MoreThanPretty, Nov 5, 2008. Just because I'm nominally polite, does not make me a pussy. Sundae Girl. |
07-20-2011, 11:35 PM | #2 |
trying hard to be a better person
Join Date: Jan 2006
Location: Brisbane, Australia
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It's too scary to think about let alone talk about.
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07-21-2011, 09:20 AM | #3 |
To shreds, you say?
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I don't think re-opening Manzanar is the answer.
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07-21-2011, 10:30 AM | #4 |
I wonder . . .
Join Date: Oct 2006
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This is not a pretty picture.
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07-21-2011, 10:41 AM | #5 |
Person who doesn't update the user title
Join Date: Mar 2011
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Sure it is, you're just not looking at it right. It's a constellational dinosaur!
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07-21-2011, 10:59 AM | #6 |
Makes some feel uncomfortable
Join Date: Dec 2005
Posts: 10,346
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Godzilla!
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"I'm certainly free, nay compelled, to spread the gospel of Spex. " - xoxoxoBruce |
07-21-2011, 11:06 AM | #7 |
™
Join Date: Jul 2003
Location: Arlington, VA
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If only. The Japanese have a long history of dealing with Godzilla. They know how to do it. But this debt thing is going to bewilder them. And with the recent tsunami, nuclear disaster and energy loss, they are going to have a tough time of it. At least their spirits were lifted from that soccer game.
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07-21-2011, 06:24 PM | #9 |
(marsupial with backward-facing pouch)
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That's one of many reasons we're called The Lucky Country :-)
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07-21-2011, 08:28 PM | #10 | |
To shreds, you say?
Join Date: Aug 2004
Location: in the house and on the street-how many, many feet we meet!
Posts: 18,449
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Quote:
Despite being good at math...
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The internet is a hateful stew of vomit you can never take completely seriously. - Her Fobs |
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07-22-2011, 02:02 AM | #11 |
The future is unwritten
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They still hold over 900 billion in US treasury securities.
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07-22-2011, 06:35 AM | #12 |
Doctor Wtf
Join Date: Oct 2007
Location: Badelaide, Baustralia
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No offense intended, but having a large amount of their reserves denominated in US dollars would be much more reassuring if you guys would quiet printing so many of the little suckers.
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Shut up and hug. MoreThanPretty, Nov 5, 2008. Just because I'm nominally polite, does not make me a pussy. Sundae Girl. |
07-22-2011, 07:57 AM | #13 |
Makes some feel uncomfortable
Join Date: Dec 2005
Posts: 10,346
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That's not a very safe investment, these days.
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"I'm certainly free, nay compelled, to spread the gospel of Spex. " - xoxoxoBruce |
07-24-2011, 06:09 PM | #14 |
Custom User Title goes here
Join Date: Mar 2007
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Hasn't Japan been in recession for decades or something?
And interest rates on savings negative? |
07-25-2011, 06:57 AM | #15 |
Doctor Wtf
Join Date: Oct 2007
Location: Badelaide, Baustralia
Posts: 12,861
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Pretty much, yes.
Just going on memory here but since 1990, roughly, over that period: interest rates have been between 0 and 1% GDP has not grown The stock market has not risen all that debt has has been run up unemployment was in the 2 to 3 % range. Just remembering, though, what caused all this. The 1980s in Japan saw a bubble in the stock market and a big bubble in ... residential real estate. That's uncomfortably familiar. IMHO, though Japan may have reached the "steady state" economy. [Grandpa rant] way back, Adam Smith founded economics, and he said: go forth and grow! And so the people grew their economies. Then Marx said, this growing can't go on forever, it must self destruct. But it seems that he was premature, in that capitalism hasn't gone yet, although it gets a bit crook at times. Maybe he underestimated how far technology could go. But even so, in terms of either finite natural resources or an approach to the maximum possible labour efficiency, economic growth must eventually stop, and yet not necessarily lead to the collapse Marx predicted, if it can get to a "rich enough" situation first. And I think that Japan may have reached that state, the "steady state" economy. It doesn't need to grow any further. If they'd realised that 20 years ago, they wouldn't have thrown all that money around.
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Shut up and hug. MoreThanPretty, Nov 5, 2008. Just because I'm nominally polite, does not make me a pussy. Sundae Girl. |
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