- Apr 2, 2013
IMF ? Oh I see its what the Debt was used for that is the main issue
The original debt was the economic bubble as the country was awashed in easy credit and frivolous spending. Then came the economic stimulus which has been mis-spent had the Japanese spent their stimulus wisely and actually restarted their economy then the debt wouldnt be an issue. Right now Japanese debt is dragging their economy as government must now raise taxes or/an cut spending
That illustrates nicely. You can find various analyses about ineffective investments, but debt in and of itself doesn't drag on the economy any more than it drags on individual wealth. If I borrow a million dollars and invest it in property that triples in value before I have to repay the loan that was an enormous boost to my personal wealth. If I borrow a million dollars and spend it on hookers and chips then I have a million dollar debt and nothing to show for it...now that would be a drag. So to say "too much debt" causes a stagnated economy you are assigning causality when none exists.