Harveyroad Japan, an economics think tank, operates the Japan Debt Clock that displays the total government debt of Japan, which grows second by second.
As of 9:57 a.m., November 5, 2009, the total government debt for Japan was 804,323,629.22 million yen.
The final figure for the Japanese population as of May 2009 was 127.529 million people; therefore, the national debt translates into 6.307 million yen per person. According to the economics journalist Seiichi Takarabe, who worked hard to create the Japan Debt Clock, Japanese government debt is growing at a pace of 29 trillion yen a year.
There has recently been extensive coverage of “the people’s debt” on TV and in newspapers since Vice Prime Minister and Minister for National Policy Naoto Kan stated on November 4 that there was the possibility that more than 44 trillion yen in new government debt would be issued in 2010, and the 2010 budget looks like it will reach around 100 trillion yen. Comments such as “national debt will reach 6.4 million yen per person” and “as soon as being born, a child is burdened with 6.4 million yen in debt” make sensational news.
In fact, I use this newsletter to warn readers every time this is reported on.
Unlike the debt of other countries, almost 100% of Japanese government debt is held by Japanese. For example, more than 50% of U.S. government debt is held by foreign countries, in particularly Japan and China. In Japan’s case, it is the same as a father borrowing money from other family members, such as a grandfather, grandmother, wife, and children. Japan does not face the risk that the U.S. does? mainly that having borrow from one’s neighbors, one’s “house” could be seized if it becomes impossible to repay the debt. For Japan, the house is in the name of the father and the whole family is living in the house; therefore there is no way for family members, excluding the father, to seize the house if the debt is not repaid. In other words, Japanese government debt has no foreign country related risk. As a result, during a global recession like the current one, the U.S. dollar (a key currency), which can be used to purchase products throughout the world, and the completely safe Japanese yen appreciate.
Well, since Japanese government bonds, Japanese government debt, are completely held by Japanese, Japanese are lenders to the government, creditors to the government.
What is happening in the Diet regarding the people (Japanese citizens), who are creditors to the government, and the government, the debtor?
A representative of the Liberal Democratic Party, the party that is responsible for accumulating this debt: Prime Minister Hatoyama, what do you think about the unhealthy fiscal policies that burden every newly born child with a debt of 6.4 million yen?
Prime Minister Hatoyama: You are the last person that I want to hear that question from.
Surprising, neither the Liberal Democratic Party, the Democratic Party of Japan, the mass media, nor the Japanese people are aware of the wonderful fact that “the instant a baby is born in Japan, the baby becomes a creditor with a claim of 6.4 million yen (on the government)”; in fact, they believe the complete opposite. (They have come to believe this)
Since national politics are for the benefit of the people, the government keeps on paying the interest on its bonds to the people by continuing to issue more debt. For the U.S., a major debtor nation, government debt is 50% of GDP. For Japan, the figure is 166%? in all of human history, Japan is the only country to have borrowed so much. Therefore, Japanese citizens are the richest people in the world and are envied by others throughout the world.
Do not forget that there are some people who jeer while being aware of untruths, such as Japanese government debt is the people’s debt, and there are some who do not know that it is an untruth.
You borrowed 1 million yen from Mr. A, but no matter how you think about it, it will be impossible to pay back Mr. A in the future. However, you must borrow more from Mr. A. What would you do? You have to make Mr. A forget that he lent you money. Working together, the mass media, government, and pundits are convincing Mr. A that he is a debtor, not a creditor. If you do not do that, you cannot continue to borrow from Mr. A forever without paying him back. Do you understand?