(12-13-2016, 03:16 PM)David Horn Wrote:(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.
All correct. And, if that debt is central govt debt, it doesn't matter as long as inflation stays below harmful levels
That's because the debt of a monetary soverign is not really debt. There is an inherent assumption that debt is eventually paid back, but a monetary soverign's debt., like the US government debt, is never paid back. A monetary soverign's debt is 'rolled over' - the US government debt is rolled over in its entirety about every 3--4 months - always has, always will with two possible exceptions -
- Congressional morons don't raise the debt ceiling, or
- President Pussygrabber gets his panties in a wade over something and pushes the nukes button.