Is Japan on the Road to Default?

from The Daily Bell

Japan’s Debt Trap … Japan’s government has a lot of debt. Not as much as people think — since much of that debt is owed by one branch of the government to another, net debt held by the public is only 134 percent of gross domestic product, not the widely quoted figure of 240 percent. But 134 percent is still a lot. About 15.6 percent of Japanese tax revenue goes to pay interest on this debt every year — about the same as for the U.S … In the end, a sovereign default is just an accounting exercise — marking down the assets of some Japanese people and marking up the assets of others. It would redistribute wealth from the old to the young. – Bloomberg

Dominant Social Theme: Japan is getting older but its economy is healthy. Never mind the naysayers.
Free-Market Analysis: This is an interesting article by a Bloomberg editorialist – Noah Smith – whose editorials sometimes border on the ridiculous. He’s a firm Keynesian – a believer that money-from-nothing can cure most economic ills – and we’ve written about some of his editorials in the past.
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