Before Abe, Japan is in a trap: 1. It has 200% debt-to GDP ratio 2. It has near zero interest rate and negative to zero inflation 3. It has near zero growth

Before Abe, Japan is in a trap: 1. It has 200% debt-to GDP ratio 2. It has near zero interest rate and negative to zero inflation 3. It has near zero growth rate. It's important to understand how this trap works: Japan simply can't have meaningful growth. If there's real growth, that will force the interest up, otherwise there will be mass misallocation and high inflation. But given a 200% debt to GDP, the government just can't afford a higher interest rate, as the debt servicing cost will eat up most of the budget. So, assuming growth rate and interest rate is about the same (big if, i know), for just maintaining the status quo (regarding debt burden), for every x% the economy grows, the government has to raise 2x the amount to cover the interest expense. That's how scary it is. That's why there's this sales tax hike and the consequent gdp dip. While other country with lower debt to gdp ratio can keep stimulating for a long time and only deal with the debt problem after recovery, Japan can't. It has to increase the government revenue relatively early, because it has a much smaller buffer to begin with.