Japan’s Debt Problem Visualized

A short, visual explanation of Japan’s debt crisis by @affalytics (https://twitter.com/affalytics).

The latest on Japan’s Debt Problem: http://www.addogram.com

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Credits:

By Addogram (http://www.addogram.com)

Inspired by the work of Kyle Bass of Hayman Capital (http://www.haymancapitalmanagement.com/).

Music: “Sounds Like A” by DoKashiteru (http://ccmixter.org/files/DoKashiteru/21179)
is licensed under a Creative Commons license (http://creativecommons.org/licenses/nc-sampling+/1.0/).

Icons: Largely courtesy of New Mediators (http://newmediators.com/references/new-mediators-icons) under a Creative Commons license (http://creativecommons.org/licenses/by-nc-sa/3.0/us/).

25 thoughts on “Japan’s Debt Problem Visualized

  1. This was actually very well done, and with clear visualized information,
    you definitely get a thumbs up.
    My hat’s off to you sir. Well done.

  2. If Japan wants to improve it’s debt situation they need to start making
    more babies (since an open immigration policy is out of the question for
    them). Do we got to treat them like pandas and show ‘em panda porn so they
    can get in the mood to make more offspring? Most Japanese men seem to be
    too busy feeling inadequate and playing dating simulators.

  3. I could describe how to fix Japan’s problem in 1 word: immigration. Japan’s
    economy is in a malaise right now but what’s most troubling is how old
    their population is. They’re going to have a lot of retirees soon and very
    few young people. Revenue will decline while expenses on pensions will soar.

    With immigrants you get a lot more (generally) young people to move in.
    There are a lot of people who want to work in Japan who currently live in
    the Philippines, Korea and China. Japan’s mantra has always been “Japan is
    a society exclusively for the Japanese” and they typically turn immigrants
    away. The only exception is guest workers in very specific industries.

    If Japan were to ease up and let people move in then younger migrant
    workers would balance the ratio of workers to pension recipients. This
    would be politically unpopular due to Japan’s cultural xenophobia but could
    solve the crisis.

    Japan’s government also needs to end this fetish it seems to have with
    stimulus projects. They haven’t worked. Yes, doling out pork to political
    supporters wins elections but it hasn’t helped the economy. Slowing the
    rate Japan’s debt grows at could alleviate the horrible debt to GDP ration
    and even worse debt to revenue ratio. If GDP can grow while debt doesn’t
    (or, at the very least, while debt grows slower than GDP) Japan can “grow
    its way out”.

    Japan also needs to kick-start its economy. The upcoming Trans-Pacific
    Partnership would expand Japan’s access to trade all across the Pacific
    from nations ranging from the United States to Australia to Canada to
    Chile. These agreements could expand foreign access to Japanese markets,
    giving Japan more foreign capital, Japanese consumers access to foreign
    goods and Japanese companies access to foreign markets. With Prime Minister
    Abe’s re-election last year and with his party gaining control of the upper
    chamber in 2013 and secure there until at least next year, now is the time
    to act. Abe will have to overcome his party’s general ties to agriculture
    but it looks like negotiations should be fairly smooth. The only other
    obstacle the TPP had was here in the United States where anti-trade
    elements of the Democratic Party had been blocking Obama’s request for the
    authority to negotiate these trade deals. Ironically, the losses Obama’s
    Democrats suffered in the 2014 mid-terms put the much more pro-trade
    Republicans in charge of both houses of Congress so he’ll likely get trade
    authority.

    A massive free trade deal like the TPP combined with economic reforms to
    make Japan’s labor and business environment better could bolster GDP growth.

    Japan’s problems are steep but not unsolvable.

  4. I feel like governments should be prohibited from spending more than they
    collect – that doesn’t make much sense to me. It might be good in the short
    run but definitely not in the long run.

  5. debt currency has to stop. Who own’s the debt. not the people, not us in
    any sense of the word. elimate debt, set the world free from usury.

  6. it amuses me that this video explains it for a 5 year old and im still
    having a hard time to understand

  7. I’m sorry, but the music you picked for this video totally distracts from
    listening the narrator. Or, you could have lowered the volume of the song.

  8. DON’T BOTHER to check out this video on YouTube: What might be an artfully
    done and informative piece is completely trashed by its own background
    noises thoroughly obscuring its message. I could not take more than the
    first few minutes of it.

  9. *Governments/Politicians are greedy, remove them from the economy. No
    government should have this kind of power over economy.*

  10. But investors aren’t worried that they won’t get their money back. Japan,
    just like the US, Canada, the UK, and every other sovereign, fiat
    currency-issuing country, enjoys borrowing at extremely low rates despite
    its debt levels. Why?

    Because if the government of Japan owes you Yen you don’t need to worry.
    Japan can always pay any debt denominated in Yen because it is the only
    source of Yen and can produce them at will and without limit.

    If investors were worried, why does Japan enjoy a low interest rate on its
    bonds?

  11. Japan’s present is America’s future. We have to get debt and spending under
    control.

  12. I am sorry I don’t understand the “Game Over” rate of 4 percent. Why is it
    at 4 percent?

    Is it because if the interest rate is at 4% there is no way the government
    in it’s current fiscal form can pay back investors. Or is the 4% unique to
    Japan because of their aging economy where growing people is much harder
    than growing the economy?

Comments are closed.