How Japan’s Government Looted the Future—and Its Children Are Paying the PriceJapan’s fiscal mismanagement and massive national debt violate the principles of democratic fiscal responsibility..Hiroshi Yoshida | August 6, 2022In recent years, Japan’s economy has somewhat rebounded but as economist Hiroshi Yoshida explains below, new issues are now arising that call into question Tokyo’s increasing debt. One of the problems he identifies is present here in the US as well, namely, “Not enough people stand up for future generations when it comes to fiscal policy.”)The only transactions that can happen in a market are ones where both parties mutually benefit and can say arigatо̄ (thank you, in Japanese) as a result. By using accounting to examine such transactions we know that both parties’ utility increases; both are better off as a result of completing the transaction. On top of that, people are not worse off than they were before should they decline to engage in a given transaction.
Governments are run by taxes. The main concern of public finance, however, has from the beginning been to raise the largest sums with the least resistance. In a nation that advocates democracy, the people, also called the citizens or the taxpayers, are sovereign. Taxes can only be levied with the consent of the governed. Running a deficit and burdening children and the unborn is in direct conflict with the principles underlying democratic fiscal policy. Never shift your deficit onto your children; that is a cornerstone to democratic governance.
Here in Japan, we must also reject the notion that we can rack up the national debt and use it as a source of financing. Yet future generations don’t have a say in what the government does here and now. Not enough people stand up for future generations when it comes to fiscal policy. In 1965, Japanese government bonds (JGBs) were issued to cover a revenue shortfall of 5.3% of government spending. Last year in 2021, that increased to cover 40 percent of government spending. The outstanding balance of government bonds issued on an ongoing basis is now twice Japan’s GDP.
When the market is allowed to function it determines interest rates, the rate at which people can borrow capital. . .
https://fee.org/articles/how-japan-s-government-looted-the-future-and-its-children-are-paying-the-price/
I post this here because the same monetary policy that killed off Japan's economic growth in the 1990s and has destroyed their ability for future growth is the exact same monetary policy that the US adopted in 2009. Those who ignore history are doomed to repeat it.
