{"id":320,"date":"2013-10-04T07:11:55","date_gmt":"2013-10-04T07:11:55","guid":{"rendered":"http:\/\/www.asadkarim.co.uk\/?p=320"},"modified":"2013-10-04T07:20:58","modified_gmt":"2013-10-04T07:20:58","slug":"japan-debt-burden","status":"publish","type":"post","link":"https:\/\/www.asadkarim.co.uk\/?p=320","title":{"rendered":"The Japan Debt Burden"},"content":{"rendered":"<p>With the <em><strong>USA<\/strong><\/em>\u00a0 just over <em><strong>100% debt to GDP<\/strong>,<\/em> the <em><strong>UK too spending more than is earned in taxes<\/strong><\/em>, <strong>Japan looks totally unstainable<\/strong>.<\/p>\n<p>The article by Kate Allen in the FT on the 1st October, gives some real insight to Japan.<br \/>\nIt is amazing to know since <strong>1975<\/strong>, Japan&#8217;s government has spent more than income. This is where government expenditure is higher than tax income. So for 38 years, the government has had to bridge that annual deficit by issuing bonds, known as <strong>Japanese Government Bonds (JGB&#8217;s).<\/strong><\/p>\n<p>Today 2013 Japan&#8217;s government revenue is about 40 Trillion Yen (\u00a30.25 Trillion), and government expenditure is about 90 Trillion Yen (\u00a30.56 Trillion).<\/p>\n<p><strong>\u00a51,000,000,000,000,000<\/strong> is the <strong>Japanese National Debt<\/strong> (yes, <strong>1000 Trillion<\/strong> Yen, my numbers are correct).<br \/>\n(15 zeros if you are interested\u2026..to be honest, (<strong>\u00a51.008 quadrillion<\/strong> is easier to say)<\/p>\n<p>That is <strong>$10.46 Trillion = \u00a36.45 Trillion<\/strong><\/p>\n<p>The <strong>UK national debt is \u00a31.2 trillion<\/strong> and <strong>our GDP is about \u00a31.5 trillion<\/strong><br \/>\n(<strong>we in the UK are about 80% Debt to GDP<\/strong>)<\/p>\n<p>This Japanese\u00a0level of debt is more than twice the size of the economy. <strong>debt versus the country\u2019s GDP is 230%<\/strong>, the highest in the developed world<\/p>\n<p>The debt is mainly held by domestic fixed income investors.<\/p>\n<p>What is effecting the Japanese economy is the high standard of living in Japan, and that has resulted in the aging population, and the need to pay for the pensions and long term health care of an aging population, putting pressure on the government\u2019s finances.<\/p>\n<p>The most crazy figure, is that today the Japanese government has to spend over <strong>20% of all its expenditure on debt interest<\/strong>.<br \/>\nthe <strong>UK pays about 6% of government expenditure on debt interest<\/strong>.<br \/>\nNow one can understand why Japan has such low interest rates, when the level of government debt is so high, it needs low rates to be able to finance itself, and also needs access to the bond market to simply bridge the gap of its tax income and outgoings. So clearly their is confidence in the Japanese government to borrow, as domestic creditors are funding the Japanese government. As long as this confidence remains,\u00a0the debt cycle continues.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With the USA\u00a0 just over 100% debt to GDP, the UK too spending more than is earned in taxes, Japan looks totally unstainable. The article by Kate Allen in the FT on the 1st October, gives some real insight to Japan. It is amazing to know since 1975, Japan&#8217;s government has spent more than income. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-320","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/320","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=320"}],"version-history":[{"count":3,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/320\/revisions"}],"predecessor-version":[{"id":323,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/320\/revisions\/323"}],"wp:attachment":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=320"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=320"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=320"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}