Japan Government Debt: Updated May 12, 2024.

 

Japan's total debt swells to record 1,286.45 tril. yen in 2023

Article Source:  https://mainichi.jp/english/articles/20240209/p2g/00m/0bu/061000c

Ideas:

Once a country, much like households begin to spend, its hard to stop and keep their spending within a budget. There are always going to be emergency situations related to economic and citizens needs, which cause budget to be forgotten.

Japan, more than other countries, has seemed to rely heavily on borrowing as a means to solve it challenges.

Being able to restore its fiscal health might not be possible, anytime soon, as it might take some strong austerity measure, which many in the Japanese government and Japanese citizens don't want.

As far as the debt in Japan goes, most of the debt is internal and not external, such as was the case with Greece in 2010.

As the debt is internal, for the most part, they don't need to worry about other governments asking for debt payments,  like Greece had to worry about back in 2010.

Again, all governments say they need and want to reduce spending, again like households, but when emergency situations arise its hard to ignore the emergencies and spending just continues.

And again, as Japan has little foreign debt or external debt owed to other governments, they don't need to worry about having to re-pay debt to other countries, and, as needed, can just spend as needed without too much worry, other than increasing the debt.

Most likely, Japanese citizens are in no mood for another sales tax increase, which was used in 2014 and 2019 to reduce the debt, but the problem is the Japanese government continued to spend and the sales tax increases had little effect on reducing the overall Japanese government debt.

The question, in the future, will households and businesses accept the idea of an increase in debt servicing on loans and so on, or will like many things, reduce their spending if possible.

If wage increases, among all companies, large, midsize, and small are big enough it could be enough to support changes in borrowing in Japan, as the level of all things increases and the average Japanese household and business doesn't see it as anything extraordinary.

But that is going to take cooperation from all companies to increase wages and most likely all companies are unable to do it.

Have a nice day and be safe!