Currently, the issues of sovereignty and debt have become pervasive which have plagued the developed countries, and they have reached the highest speed and most widely spread range since the end of the World War II. 10 Fabulous Tricks for UGG Boots Classic Short Especially recently, the Japanese First Life Insurance`s a forecast report show that, Japan will carry the total debt about 950 trillion yen in 2001, it will be for the year 200% of GDP. Japan may run into national bankruptcy since they can`t bear the so high deficit and collapse the debt bubble, which will be a big bomb during the wordwide.Necessary Tricks that Deserve to Learn for Maintaining Your UGG Boots Classic Cardy
Will Japan be the next Greece? What`s relevant with macroeconomical policies behind Japan debt crisis? These questions are worthy of being considered. Since Keynes has found the classical western economic, about the total output or total income decided the theme of the macroeconomic that was divided into two parts: One is to explain why the total output always be cycle recession and expansion in a short time, the other is to explain the growth of the potential total output level. To deal with the financial crisis, broke up in 2008 and brought a recession to Japanese economy, Japan made an unprecedented powerful plan of economic stimulus to increase issuing debt. However, the long-term fragile fiscal problems, generated by massive expansive fiscal policy, have been clearer that`s accumulating sovereign debt`s risk. Japan has been carried out 4 economic stimulus plans, inpoured 75 trillion yen, since the financial crisis`s outbreak.UGG Boots Classic Tall , Top Mother's Day Buys for Love
In the progress of the recession of the real economy and the contraction of credit as well as demand in the private sectors, the anti-cyclical policy launched by the public sector to stop the impact during the recession induced by declined output, credit crunch and capital price reduced, it really works to shorten the period of recession. However, the negative effects also become apparent: It means that the Government focuses the risks which were originally scattered in various economic entities (such as financial institutions) and focuses the spreading risk of the balance sheet as the administrative assets and liabilities, whose direct results are the increase of the deficit and the financing costs and expansion of the public balance sheet. Unlike other countries, the Japanese deficit is cumulative, which includes both cyclical deficit and structural deficit, and these deficits and debts are closely related with the deficit financing launched in Japan. Once the expansionary fiscal policy is prolonged, it will cause serious economic consequences.
The prolonged financial stimulus packages overstep the Japan`s finance and that not only did not reach the expectation, but also produce a serious [squeezing-out" to private investment. The transition gap between real GDP and potential GDP-produced by using national productivity the best-is still high, resulting in a lower per capita output and, meanwhile, deteriorating Japanese fiscal situation and inflating the total of treasury bonds. Since Japanese government deficit or finance by taxation, debt or increasing the currency supply by central bank. Then it`s not hard to understand why Japanese economy is in the state of debt deflation.
The situation of Japanese debt is actually the worst one among developed countries. According to the proportion of GDP and amount of liabilities, the amount of 2009 Japanese debts had been up to at a record 871.5 trillion yen-174% of GDP-that`s the highest among Organization for Economic Cooperation and Development (OECD) members. As the debt growth speed is faster than the economy resurgence`s, and the weak growth for private capital, Japanese people saving rate has been down to 3.3% in 2008 from 10.5% in 1998, IMF presaid Japanese saving rate will be negative, this trend is evitable, the gap between capital and debt will remain bigger.
Japanese debt problem make us rethink the anti-crisis mechanism, "deficit financing [ as a demand management policy. Its function is short." Deficit financing is unfit to be long-term. Once expansionary fiscal policy becomes long-term, it will cause a serious economic consequence, weakening the regulating function of fiscal policy. In the longtime, if we want to overcome the economic recession fundamentally, we must change the traditional demand management to promote long-term growth of supply management policies, improved the incorrect economic structure, between stimulate economic growth and balance the economic development to explore the new way