Whilst simultaneously having a rapidly declining birth rate, and relatively low levels of immigration, to maintain a homogeneous society, without imploding in on itself?
In: Economics
The Japanese government has a *net* debt to gdp ratio of about 114%.
https://www.stlouisfed.org/on-the-economy/2023/nov/what-lessons-drawn-japans-high-debt-gdp-ratio
A huge fraction of the debt the Japanese government has basically is purchased assets, both foreign and domestic. Those assets have returns.
Their net debt position is probably better than that of the United States, or at least within the margin of error on these estimates given that we tend to look at data that is a few months to a couple of years old.
This isn’t necessarily a good strategy, but image you went and borrowed a million dollars. You then took that million dollars and bought a bunch of investments like stocks and US government bonds. You then use the returns on the assets to pay the interest on the debt.
Japan has a shrinking workforce, and population. In that situation you would expect them to have a debt to gdp problem that is only going to get worse, and it might. But they have more than 2 trillion dollars in foreign investments. If those pay returns faster than gdp shrinks (because other countries grow and produce returns) they might be ok.
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