8 ms·

A -0.008 rate of GDP growth in a country with a -0.009 rate of working age labor force growth is actually positive growth, albeit slow. It is not in any realist

A -0.008 rate of GDP growth in a country with a -0.009 rate of working age labor force growth is actually positive growth, albeit slow. It is not in any realistic sense a recession. Japan continues to be the first world nation with the best long term prospects for its citizens. The present standard of living is not clearly exceeded anywhere in the world. Of course, adjustment to and recovery from severe overpopulation is going to create some difficulties over the next half century. It's nothing the country can't adjust to.

hawkice 11y ago
So, those numbers together indicate an increase in productivity -- but there are non-working age people in the economy that still need a slice of the pie. Productivity growth is good, but I'd focus on the larger population changes.
- WildUtah 11y ago
  It's an investment in the future. The Japanese will be much better off with a third or a fifth of their current population someday on their overstuffed islands; that's going to require some shrinkage. If you intend to encourage everyone to live out his full natural lifespan in comfort -- as we should -- then it's going to cost a little. Shouldn't cost too much, though.
ekianjo 11y ago
> best long term prospects for its citizens Seems like you are conveniently ignoring the 300+ % of Japan's GDP of Public debt. Yeah, a bright future.
- vox_mollis 11y ago
  I believe the stock HN response to mathematically certain sovereign debt disaster is either "print your way out" or "grow your way out".
  - ekianjo 11y ago
    > is either "print your way out" I have yet to see any country which was able to get to an actual way out by inflating their currency. Reality always catches up.
    - antome 11y ago
      Germany made their way out after WWI, but lets just say the results weren't pretty. At least from historical precedent, it seems the best solution is to "cheat" your way out, by massively inflating a currency, then if hyperinflation kicks in, create a new currency in quick succession.
    - Symmetry 11y ago
      Huh, there are plenty of examples. Italy did it more than once, for example. But it isn't obvious whether its better to inflate or to default - both are painful and you need to be running a surplus barring interest payments or they might be disastrous.
    - JamesBarney 11y ago
      The U.K went from a debt to gdp ratio of 225% to a low of 33%.[0] The U.S. went from a debt to gdp ratio of 120% down to 37%.[1] This isn't the first time countries have had to run large deficits. [0]http://www.economicshelp.org/blog/11697/debt/post-war-boom/ http://www.economicshelp.org/blog/11697/debt/post-war-boom/ [1]http://dailybail.com/home/chart-us-debt-to-gdp-1940-2015.html http://dailybail.com/home/chart-us-debt-to-gdp-1940-2015.htm...
      - jazzyk 11y ago
        In the US case, it "only" took 40+ years - and now we are sadly almost back at 100%+
        JamesBarney 11y ago
        Which is not quite as long as it's been since the time we had a recession of this magnitude.
- Retric 11y ago
  Most of that is internal debt, which is very different from over sea debt.
  - veidr 11y ago
    Why? (Not disputing, just would like to have a clear explanation.)
    - Retric 11y ago
      Lot's of reasons the most obvious is it does not impact trade or currency. However, from a repayment standpoint the debt payments are generally taxable which reduces the effective interest rate dramatically. Hypothetical example: Interest rates are 8%, inflation is 5% = 3% over inflation. Now tax that 8% at 30% and your paying 5.6% - 5% inflation = 0.6% effective rate. (Assuming you don't let interest compound tax free.)
      - ddeck 11y ago
        It most definitely affects the currency, and the currency of course affects trade. The core difference between internal and external debt - or more precisely debt denominated in a country's sovereign currency vs. foreign currency - is that a country can typically always avoid defaulting on domestic debt by printing more money, despite typical "independence" of central banks. Rates on domestic debt can also be controlled in a similar way. The Japanese Central Bank is currently undertaking a quantitative easing program of gargantuan proportions, which basically means that they create new money every month and use it to buy Japanese government bonds. They are, albeit indirectly, creating money and loaning it to the government, which then uses it to run a large deficit. Government social programs are significant. The effect on the currency has been dramatic, with the JPY depreciating nearly 40% over the last three years versus the dollar. The central is bank is expected by many analysts to expand the program in the near future. Although the stated intention is to generate inflation, a cynic might suggest that without such massive buying by the central bank, the governments enormous debt load would soon be at risk of becoming unsustainable - JGB interest rates could easily become unserviceable as investors become more concerned.
- jld89 11y ago
  And you are conveniently forgetting that Japan is the biggest creditor in the world and the one that possesses more foreign net assets than even China. So yes... definitely a bright future despite the colossal "debt".
veidr 11y ago
What "overpopulation" are you talking about? The Japanese population is shrinking. Or do you mean "overpopulation of old people"?
- WildUtah 11y ago
  Japan's population is about 127MM people. Sustainable population with healthy natural fish stocks, abundant open space, sufficient rice stocks with diverse strains, a high quality of life, cheap spacious housing, and nature reserves, woods, and wilderness to maintain a healthy ecology would be about 10MM-40MM. With low birth rates, Japan is on its way back down toward those happy sustainable levels.
  - saiya-jin 11y ago
    not true, you over-romanticize your view on that country
  - jazzyk 11y ago
    Abundant open space? Cheap spacious housing? Can't say if you are being sarcastic or not?
    - WildUtah 11y ago
      Do you think those things won't contribute to a happy life? I love open space and affordable housing and I'd like to have more. Sorry, but I can't tell what you're getting at. What do you suppose would be sarcastic? Your comment needs a lot more explanation.
      - jazzyk 11y ago
        Ah, I did not quite get your comment - you are saying that _once they get to 40M (instead of 127M), they will have all those things - it will take a long time, though. Right now, Japan is famous for having very little open space and sky-high real-estate prices (and rents) - that's why I thought you were sarcastic.
saiya-jin 11y ago
as for standards of living, what about Switzerland, Lichtenstein, Monaco, Luxembourg, quite a few Caribbean islands etc? Just curious about such bold statements, Japan is not the type of country I would like to live in, for quite a few reasons
- WildUtah 11y ago
  Okay, a handful of tiny countries with massive immigration of millionaire tax cheats may have more per capita cash. That's not meaningful in the context of a real sustainable large country. "Japan is not the type of country I would like to live in" I agree -- the weather isn't to my taste. Remember you're free to emigrate at any time.
  - pnut 11y ago
    For years I was misled by statements like this, into thinking that immigration is a decision you can make one day, and just polish off your passport, pack a bag, and flip the middle finger to your place of origin. Who knows, maybe 40 years ago that was true, but it is emphatically NOT true now. Getting a work visa in another country is extremely difficult and generally takes years of preparation, outside a few narrow carveouts like working holiday. And yes, we in tech have it easier than others (besides medical doctors). My corollary is yes, you are free to emigrate at any time, provided you have met the stringent requirements of your destination. To me it's like saying, you are free to swim across the Pacific Ocean.
    - WildUtah 11y ago
      It's easy to get a work permit if you've bothered to get a decent education in all sorts of desirable first world countries. Japan is one. Canada, Mexico, Hong Kong, Korea. Probably lots of places in Europe, though I can't say which ones; people seem to go to Poland, Hungary, and the Czech Republic a lot. Most of those places you can literally just show up and be working in six weeks. Some take a little longer. The only way it could be years of preparation is including your whole education.
greeneggs 11y ago
"It is not in any realistic sense a recession." It fits the definition of a recession. I guess you are arguing that the definition of recession should be changed to use per capita GDP numbers. This isn't clear, however. From the standpoint of an investor, say, you want to invest in an enterprise that will grow. If your business is shrinking, it doesn't help you that it is growing per capita.
- WildUtah 11y ago
  A recession is a general failure of businesses across all economic sectors. That's what the word has meant for three centuries. Some modern witch doctors have literally made up arbitrary economic statistics and defined a particular pattern of those statistics to be a recession. I could define a recession to be stinky fermented soybeans and then Japan would always be full of delicious recession (mmm 納豆). You should not take either of those definitions too seriously.

hawkice 11y ago

So, those numbers together indicate an increase in productivity -- but there are non-working age people in the economy that still need a slice of the pie. Productivity growth is good, but I'd focus on the larger population changes.

WildUtah 11y ago
It's an investment in the future. The Japanese will be much better off with a third or a fifth of their current population someday on their overstuffed islands; that's going to require some shrinkage. If you intend to encourage everyone to live out his full natural lifespan in comfort -- as we should -- then it's going to cost a little. Shouldn't cost too much, though.

ekianjo 11y ago

> best long term prospects for its citizens Seems like you are conveniently ignoring the 300+ % of Japan's GDP of Public debt. Yeah, a bright future.

vox_mollis 11y ago
I believe the stock HN response to mathematically certain sovereign debt disaster is either "print your way out" or "grow your way out".
- ekianjo 11y ago
  > is either "print your way out" I have yet to see any country which was able to get to an actual way out by inflating their currency. Reality always catches up.
  - antome 11y ago
    Germany made their way out after WWI, but lets just say the results weren't pretty. At least from historical precedent, it seems the best solution is to "cheat" your way out, by massively inflating a currency, then if hyperinflation kicks in, create a new currency in quick succession.
  - Symmetry 11y ago
    Huh, there are plenty of examples. Italy did it more than once, for example. But it isn't obvious whether its better to inflate or to default - both are painful and you need to be running a surplus barring interest payments or they might be disastrous.
  - JamesBarney 11y ago
    The U.K went from a debt to gdp ratio of 225% to a low of 33%.[0] The U.S. went from a debt to gdp ratio of 120% down to 37%.[1] This isn't the first time countries have had to run large deficits. [0]http://www.economicshelp.org/blog/11697/debt/post-war-boom/ http://www.economicshelp.org/blog/11697/debt/post-war-boom/ [1]http://dailybail.com/home/chart-us-debt-to-gdp-1940-2015.html http://dailybail.com/home/chart-us-debt-to-gdp-1940-2015.htm...
    - jazzyk 11y ago
      In the US case, it "only" took 40+ years - and now we are sadly almost back at 100%+
      - JamesBarney 11y ago
        Which is not quite as long as it's been since the time we had a recession of this magnitude.
Retric 11y ago
Most of that is internal debt, which is very different from over sea debt.
- veidr 11y ago
  Why? (Not disputing, just would like to have a clear explanation.)
  - Retric 11y ago
    Lot's of reasons the most obvious is it does not impact trade or currency. However, from a repayment standpoint the debt payments are generally taxable which reduces the effective interest rate dramatically. Hypothetical example: Interest rates are 8%, inflation is 5% = 3% over inflation. Now tax that 8% at 30% and your paying 5.6% - 5% inflation = 0.6% effective rate. (Assuming you don't let interest compound tax free.)
    - ddeck 11y ago
      It most definitely affects the currency, and the currency of course affects trade. The core difference between internal and external debt - or more precisely debt denominated in a country's sovereign currency vs. foreign currency - is that a country can typically always avoid defaulting on domestic debt by printing more money, despite typical "independence" of central banks. Rates on domestic debt can also be controlled in a similar way. The Japanese Central Bank is currently undertaking a quantitative easing program of gargantuan proportions, which basically means that they create new money every month and use it to buy Japanese government bonds. They are, albeit indirectly, creating money and loaning it to the government, which then uses it to run a large deficit. Government social programs are significant. The effect on the currency has been dramatic, with the JPY depreciating nearly 40% over the last three years versus the dollar. The central is bank is expected by many analysts to expand the program in the near future. Although the stated intention is to generate inflation, a cynic might suggest that without such massive buying by the central bank, the governments enormous debt load would soon be at risk of becoming unsustainable - JGB interest rates could easily become unserviceable as investors become more concerned.
jld89 11y ago
And you are conveniently forgetting that Japan is the biggest creditor in the world and the one that possesses more foreign net assets than even China. So yes... definitely a bright future despite the colossal "debt".

veidr 11y ago

What "overpopulation" are you talking about? The Japanese population is shrinking. Or do you mean "overpopulation of old people"?

WildUtah 11y ago
Japan's population is about 127MM people. Sustainable population with healthy natural fish stocks, abundant open space, sufficient rice stocks with diverse strains, a high quality of life, cheap spacious housing, and nature reserves, woods, and wilderness to maintain a healthy ecology would be about 10MM-40MM. With low birth rates, Japan is on its way back down toward those happy sustainable levels.
- saiya-jin 11y ago
  not true, you over-romanticize your view on that country
- jazzyk 11y ago
  Abundant open space? Cheap spacious housing? Can't say if you are being sarcastic or not?
  - WildUtah 11y ago
    Do you think those things won't contribute to a happy life? I love open space and affordable housing and I'd like to have more. Sorry, but I can't tell what you're getting at. What do you suppose would be sarcastic? Your comment needs a lot more explanation.
    - jazzyk 11y ago
      Ah, I did not quite get your comment - you are saying that _once they get to 40M (instead of 127M), they will have all those things - it will take a long time, though. Right now, Japan is famous for having very little open space and sky-high real-estate prices (and rents) - that's why I thought you were sarcastic.

saiya-jin 11y ago

as for standards of living, what about Switzerland, Lichtenstein, Monaco, Luxembourg, quite a few Caribbean islands etc? Just curious about such bold statements, Japan is not the type of country I would like to live in, for quite a few reasons

WildUtah 11y ago
Okay, a handful of tiny countries with massive immigration of millionaire tax cheats may have more per capita cash. That's not meaningful in the context of a real sustainable large country. "Japan is not the type of country I would like to live in" I agree -- the weather isn't to my taste. Remember you're free to emigrate at any time.
- pnut 11y ago
  For years I was misled by statements like this, into thinking that immigration is a decision you can make one day, and just polish off your passport, pack a bag, and flip the middle finger to your place of origin. Who knows, maybe 40 years ago that was true, but it is emphatically NOT true now. Getting a work visa in another country is extremely difficult and generally takes years of preparation, outside a few narrow carveouts like working holiday. And yes, we in tech have it easier than others (besides medical doctors). My corollary is yes, you are free to emigrate at any time, provided you have met the stringent requirements of your destination. To me it's like saying, you are free to swim across the Pacific Ocean.
  - WildUtah 11y ago
    It's easy to get a work permit if you've bothered to get a decent education in all sorts of desirable first world countries. Japan is one. Canada, Mexico, Hong Kong, Korea. Probably lots of places in Europe, though I can't say which ones; people seem to go to Poland, Hungary, and the Czech Republic a lot. Most of those places you can literally just show up and be working in six weeks. Some take a little longer. The only way it could be years of preparation is including your whole education.

greeneggs 11y ago

"It is not in any realistic sense a recession." It fits the definition of a recession. I guess you are arguing that the definition of recession should be changed to use per capita GDP numbers. This isn't clear, however. From the standpoint of an investor, say, you want to invest in an enterprise that will grow. If your business is shrinking, it doesn't help you that it is growing per capita.

WildUtah 11y ago
A recession is a general failure of businesses across all economic sectors. That's what the word has meant for three centuries. Some modern witch doctors have literally made up arbitrary economic statistics and defined a particular pattern of those statistics to be a recession. I could define a recession to be stinky fermented soybeans and then Japan would always be full of delicious recession (mmm 納豆). You should not take either of those definitions too seriously.