Lets make fun of Obama while he is still relevant.

[David Horn]

(12-10-2016, 09:53 AM)playwrite Wrote:

(12-06-2016, 04:13 PM)Warren Dew Wrote: I'm not assuming negative GDP growth; I'm looking at statistics from Japan, that show all the things I said.

What I am assuming is that with the US doing the same demographic transition to a retiree heavy population that Japan did 2 decades ago, the effect on us is going to be similar, unless we use different policies.

But the result of the declining population ISN'T a supply issue.  Do you really believe the Japanese are limited in how many Toyotas they can produce or sale?  Have you ever seen a Japanese robotic assembly plant?  I have, and I can tell you there's nothing holding back production other than someone there buying what comes out at the end.

It is a DEMAND issue, and their is a positive feedback element in that as people get freaked by the decline and they spend less and save more.  That savings goess into non-productive JGBs.  Then the interest-differential currency carry trade makes it even worse.  They're stuck because there is not enough economic demand.  Monetary policy or supply side fiscal policy isn't going to do jack.  They've done demand stimulus spending but if you look at the ACTUAL 30 year record, it has been half-ass with plenty of stops and starts for the usual political austerity horseshit reasons.

Let's not discount the obvious: the population of Japan is aging and declining.  The old growth model is hard to maintain in that environment, so some other measure is needed.  It's easy to analyze rising per capita productivity, but the residual per capita debt is also rising.  It's inevitable.  Monetizing the debt over time may be the only choice they have, and it may add a bit of needed inflation too.  Other than that, I'm at a loss.