National debt is not the people's debt - The country is not a company - Breakdown of government bond holdings that still do not penetrate public opinion.
2024-01-09
Category:Japan
「国債等関係諸資料」令和5年6月末国債保有内訳 Photo by 財務省 (licenced by 財務省 )
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National debt is not a national debt.
The image at the beginning shows the breakdown of Japanese government bond holdings. I sometimes see people say that national debt is the nation's debt or that it is the same as corporate debt, but national debt is the government's debt, not the people's debt. Even if a country is compared to a company, companies do not borrow money from their employees. Debt comes from outside the company, and in this case, it involves purchasing Japanese government bonds from overseas. If most of the debt is overseas, it is natural that the company will default if it cannot be repaid. Purchases of Japanese government bonds from overseas account for ７.３%.
The Japanese government has assets equivalent to its liabilities.
If you really want to say that it is the same as a company, would you say that purchases in Japan are borrowed and borrowed within the company or within the group company? Yoichi Takahashi considers the Bank of Japan to be the same as a subsidiary of the government, and explains that it is the same in terms of consolidation, regardless of whether interest is charged. The Bank of Japan holds ５３.２% of Japanese government bonds. He is well known for introducing BS to show that the country holds government assets equivalent to the government's debts (excluding the holdings of the Bank of Japan). The total amount of government assets ranks first in the world, exceeding both the United States and China. Below is the balance sheet (BS) of Japan.
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Japanese government bonds are debt denominated in yen.
Furthermore, Japanese government bonds are mainly traded in yen, which means that there is no change in value based on foreign currencies. In the case of foreign currency transactions, if the value of your home currency plummets, the face value of your debt will rise accordingly. Suppose your country's currency drops to half its value. Alternatively, if the foreign currency used when trading government bonds doubles, the debt will also double, but since the transaction is in Japanese yen, there will be no effect at all. In an extreme case, former Prime Minister Aso said that repayment would be possible by increasing the number of yen bids. In this case, there will be inflation and the value of the yen will fall, but the theory is that the debt can be repaid because it is the face value of the yen. This was actually said by Taro Aso, a former Prime Minister and former Minister of Finance.
Japan, the world's largest creditor country
Secondly, the Japanese government is also the world's No. １ creditor country. In other words, they have foreign bonds and foreign assets. The fact that we are currently talking about national debt as a problem is actually making a fuss about only the debt part, and in fact, Japan has the most foreign assets in the world. This assumes that the government bonds are denominated in yen as mentioned earlier, and if more yen is printed, the value of the yen will fall and the yen will become weaker. If you do this, overseas assets purchased in dollars or euros will increase in value when converted to yen, so the difference will be a large income. Even with the current depreciation of the yen, a large profit margin was generated due to the increase in the valuation of overseas assets.
Print more yen up to 2% inflation rate
Representative Sanae Takaichi has advocated the ``Japanese Economic Resilience Plan,'' which calls for a temporary freeze on primary balance (PB) regulations and calls for industrial investment through the issuance of government bonds. She says that even if inflation were caused by printing more yen, it would not have a big impact if the inflation rate was less than ２%. Currently, the yen is depreciating due to the difference in interest rates due to the Fed's interest rate hikes, but the original goal is to induce a depreciation of the yen through the issuance of government bonds and increase the number of bonds, strengthen international competitiveness, and increase wages and tax revenues through rising prices. If the manufacturing industry returns to Japan due to the weak yen, GDP and tax revenue will increase, and government debt can be reduced. For now, this is just the effect of a weaker yen due to interest rate differences, but we are already seeing significant results.
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Public opinion without examining Abenomics - there is no point in criticizing it based on contradictory premises.
There are some surveys and opinions in public opinion that Abenomics has ruined Japan, but is that true? First of all, what is Abenomics? Were you asking people who answered the same question as in the poll, or were you asking people you didn't know? I wonder if asking someone I don't know will give me the results I expected. First, let's review the three arrows of Abenomics.
Three arrows of Abenomics
Bold monetary policyFlexible fiscal policyGrowth strategy to stimulate private investment
Monetary policy is still ongoing, but former Prime Minister Abe has said that the consumption tax increase was decided in advance and was carried out at a time when it could not be postponed, so he was unable to fire a second arrow. In other words, Abenomics is actually the first arrow in a variety of environments. In other words, I would understand if there was an evaluation of the fact that it did not advance to the second stage, but I have doubts about evaluating Abenomics itself.
Next, I will list some of the achievements of Abenomics.
Main achievements of Abenomics
The total national and local tax revenue will reach a record high of 107 trillion yen in fiscal 2019, up from 78.7 trillion yen in fiscal 2012. The stock price, which was around 8,000 yen, rose to over 24,000 yen under the Abe administration. Public pension investment profits increased by 57.6 trillion yen in seven and a half years. The effective job opening ratio was 83 job openings for every 100 people in 2012, and 164 job openings for every 100 people in 2019. Business operators improved their treatment due to the labor shortage. The minimum hourly wage rose from 749 yen in 2012 to 901 yen in 2019. The rate of children from single-parent households going on to university increased significantly from 23.9% to 41.9%.
Sanaenomics (Japanese Economic Resilience Plan) will be published. Representative Sanae Takaichi announced a policy to carry on Abenomics during the last presidential election.
Sanaenomics three arrows
Financial easingFlexible fiscal stimulus in times of emergencyBold crisis management investment/growth investment
What they have in common is that monetary easing policy will continue, and if the Takauchi Cabinet is elected, the government will implement aggressive fiscal policy.
The fact that the Japanese government's balance sheet was introduced for the first time in 1995 means that the Japanese government did not have the concept of strategic investment, which companies take for granted. How can you invest without a balance sheet or cash flow statement? It was only a matter of being able to compare the income and expenditure for a single year, or the previous year. The term "primary balance" has come to be used like crazy. At that time, Japan believed that deregulation would revive the economy, and the government repeatedly took the approach of relaxing regulations through legal revisions.
As a result, the Japanese government was unable to rebuild the national economy or make strategic investments for economic growth after the collapse of the bubble, which was an unprecedented economic crisis. More than 30 years have passed since we stubbornly closed the doors. Then, companies moved their manufacturing sectors to emerging countries, and GDP and tax revenues mainly went to neighboring countries such as China, creating a dual wage structure of dispatched labor in order to prevent an increase in the number of unemployed people in Japan. . The economic disparity that arose from this process is said to be one of the causes of the current declining birthrate.
So, has Abenomics ruined Japan? Would that also mean denying Sanaenomics? Or will we continue to turn down investments from the government as we have been doing, paying close attention to the primary balance under the guidance of the Ministry of Finance and listening to the beautiful words of fiscal consolidation? The point of contention should be to gather opinions on whether or not bold fiscal spending by the government is necessary. In any case, regardless of whether the policy is better or not, there are parts where it seems like the point at issue is not policy at all, but just an extension of a personal attack, which is unfortunate.
30 years lost as a result of passive fiscal policy
In other words, those who claim that government debt is bad have the completely opposite idea. What ruined Japan after the bursting of the bubble was rather the primary balance discipline, the inability to focus on single-year income and expenditures and to make long-term investments. Japan tightened its finances in the most critical economic situation. If it is the same as a company, when the company is in crisis, the company's safe is closed like a shell, and for the past ３０ years, the company has been operating in a state of poverty and not being able to make long-term investments. This is the so-called curse of PB by the Ministry of Finance.
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Which country did Japan invade? - Japan invaded European - controlled areas - Asian liberation and colonial policy.
When considering the aspects of Japan's war of aggression, first of all, the Korean Peninsula was made an independent state by the Treaty of Shimonoseki and was annexed by the Treaty of Annexation, so it is not included in the invasion. Taiwan was also formally ceded under the Treaty of Shimonoseki, so it was not included in the invasion. Southeast Asian countries are already Western colonies and do not have administrative powers. To be honest, Japan invaded Britain, the Netherlands, France, Portugal, and the United States. Would you call this an invasion of Asia? Viewed in this way, if China had dared to invade, it would have been China that was barely maintaining its administrative power.
Now, regarding what Japan's purpose was, if we say that Japan is no different from Western colonies in terms of increasing its national power through colonial rule, the reality is different. Japan did not adopt racist policies and developed laws, and eventually Southeast Asian countries grew to the point where they were able to fight against whites and protect their own countries on their own. War operations are meaningless unless they are linked to national interests. So these things are always related to Japan's national interests.
Historically speaking, Japan was isolated from the rest of the world until the Meiji Restoration. It took only 27 years from the establishment of the new government to its victory over the Qing Dynasty, which was said to be a world power. It would be 37 years until Japan again defeated Russia, which was said to be a world power. Next, it was in 1919 that Japan won World War I and became a permanent member of the League of Nations, so Japan isolated itself from developing countries that had never seen a steam engine, and only 51 In 2019, I will be sitting on a chair at the table at the center of the world. Japan proposed the ''Racism Discrimination Elimination Bill.''
There is probably no one who has not seen the vast area called Asia on a map. On top of that, over a long period of 400 years, the white maritime nation colonized Asian countries one after another. Japan is an island nation floating on the farthest east coast. Japan's opening to the world was related to this movement of white people. The colonization of the vast area of Asia was already approaching Japan.
Japan's Restoration and opening of the country, as well as the energy of the industrial revolution and modernization, were explosively generated during these global movements. If one country or one ethnic group in such a vast region of Asia, where so many ethnic groups live, were to unite and confront the white countries, the white people would never come to such a farthest island nation. It would be a good thing if there was even one country that could stop the invasion of white people, but unfortunately there was not a single country in Asia like that.
The main focus of Japan's colonial policy in Asia is to build a collective security system for people of color in Asia and to spread the results of Japan's Restoration to Asia. This is clearly stated in the Greater East Asia Joint Declaration, which is signed by the participating leaders from each country. If we look at history from a myopic perspective, we will not be able to understand this era.This may seem obvious, but no matter how many times you hear about former comfort women or visit coal mine sites, you will never understand this era.
Upstream business strategically conducted by Japan.A form of processing trade in which Asian countries, including Korea, assemble and export them.
upstream business used to be a common practice.At that time, supply was scarce in the balance between supply and demand and supply were in short supply.The raw material is the most upstream and the final product is the downstream.Considering distribution, retailers sell to final consumers are the most downstream.If water doesn't flow, you can't do business, but in the age of oversupply, the story will change.The downstream retail stores are more powerful than the upstream manufacturing industry.Japan's 7-Eleven is a symbolic example of this, and OEMs want large companies to build private brands, and manufacturers want 7-Eleven to sell their products.
Japan has developed its upstream business.The strategy is to start with basic research, develop industrial machinery, and manufacture things require Japanese basic technology.Regarding the revision of export conditions for three strategic substances, including hydrogen fluoride, the South Korean government's insistence on supply chain integration means downstream integration, which is intended to put pressure on upstream manufacturing.
Lawmaker Matsukawa of the Liberal Democratic Party affirmed to the world that the global supply chain will not be in trouble.As they say, The world's supply chain never collapsed .
Almost all manufacturing industries in Korea are operated by Japanese industrial machinery and chemicals and parts manufactured in Japan.Currently, They are manufacturing by the basic parts imported from Japan.
Just because there is a labor shortage doesn't mean it's okay to collect labor from anywhere - let alone anti - Japanese countries.
Even if we overcome deflation and restore international competitiveness through the fiscal stimulus advocated by the late Mr. Abe and Mr. Takaichi, and even if the total amount of money increases and wages rise, if the economy becomes rich, this means that domestic production will rise. , it is said that even with the current production volume, it will no longer be possible to make things as the population declines, so if the production volume increases, there will be an even greater shortage of personnel.
The current dual wage structure for dispatched workers is simply a measure to compensate for the domestic unemployment rate by relocating production bases to emerging countries due to the strong yen. On the other hand, if the yen depreciates, it will become possible to move production bases back to Japan, and some companies have actually returned to Japan amid the current depreciation of the yen. If production bases return, GDP and tax revenue will increase.
In other words, this is the economic growth that the people want, but what is crucially lacking is human resources. It is difficult to believe that Japan's industrial structure, which is dominated by manufacturing, will be easily replaced by AI. While Japan's competitiveness will increase if Abenomics and Mr. Takaichi's economic policies are implemented, I imagine that it will also lead to a shortage of labor in Japan.
Although there was a shortage of soldiers during the Greater East Asia War, it is said that only about 1.6% of recruited soldiers from the peninsula were able to join the Japanese army. If they don't understand the Japanese language, Japanese culture, or the purpose of war, the entire unit will suffer. Even Japanese women were able to work under the Women's Volunteer Corps Ordinance after passing various hurdles, and those who passed were given the approval of the local governor at the time.
There are people in Europe and America who think it would be a good idea to make immigrants and illegal immigrants work, but do they want to make the same mistakes and go down the path of creating social unrest? If human resources are absolutely necessary, the host countries should be limited by considering cultural background, historical and diplomatic compatibility, and Japan should even be involved in the education of Japanese language and culture. It would be better to abandon ideas such as procuring labor from countries that provide anti-Japanese education now.
Three years of Japanese and Russian people living together in the Northern Territories - Return of the territory and current residents
Japan's territorial issues include Takeshima, the Senkaku Islands, and the Northern Territories. These three regions are completely different geopolitically, historically, in the relationship between the two countries, and in the process by which problems arise. To put the issue of the Northern Territories simply, Japan announced its surrender on August 15th, but it was officially announced on September 2nd that the Soviet Union later ratified the Potsdam Declaration, but it was not accepted internationally outside of the United States, Britain, China, and the Soviet Union. April 28, 1952, the day the San Francisco Peace Treaty went into effect. During that time, the former Soviet Union invaded and annexed the Northern Territories.
It was in 1948 that the Soviet Union ordered deportation to the Japanese islanders, so there was a period of about three years from 1945 when Soviet soldiers, Soviet immigrants, and Japanese people lived together. It is very interesting to hear the testimonies of Japanese islanders from that era.
``Russians were big and scary.'' ``Soldiers came to my house with shoes on and guns, and they said, ``Watch, watch!'' So I thought it was something, so I handed him the watch, and he said, ``Harasho, harasho,'' and was happy. So I went home.
Russian children were cute and cute and looked like angels. Her eyes were so white and big, and her green eyes were cute like a cat's. Japanese and Russian children played together, going back and forth to each other's homes. This is the testimony of former islanders and Japanese people.
I believe that former Prime Minister Shinzo Abe was the first prime minister to ask the Japanese people, who are demanding the return of the Northern Territories, where about 17,000 people currently live, whether they should expel the Russians currently living there. The Japanese people living in the Northern Territories at the time continued to demand the return of their territory, but the Russians living there never asked them to leave or take away their homes.
Korea is opposed to Sado Kanayama's application for registration as a World Heritage site.Japan have evidence that it was not forced labor.
The Cabinet's decision in April 2021 and the inclusion of warship islands as UNESCO World Heritage sites are posted on the grounds that the recruitment at that time was not a forced labor.Forced Labour Convention in 1930.
When registering as a warship island, South Korea strongly opposes it, and Japan has even proposed a draft of the plan, saying that it will support it if it writes forcedlabor.Japan refused, and at the Japan-South Korea Foreign Ministers' Meeting, South Korea finally agreed to write forcedtowork.The Korean side was particular about the description because it knew that forced labor would be described as forced labor in the Forced Labor Convention at that time.Recruitment is not included in forced labor.It is stated in Article 2-2.The recruitment of the General Mobilization Order falls under paragraph (b).
South Korea opposes Japan's move to apply for the registration of Sado Kanayama as a World Heritage Site, saying it will not allow forced labor to be designated as a World Heritage Site.This is just the same view as it was on Gunkanjima.
C029 - Forced Labour Convention, 1930 (No. 29)
ARTICLE 1
1. Each Member of the International Labour Organisation which ratifies this Convention undertakes to suppress the use of forced or compulsory labour in all its forms within the shortest possible period.
ARTICLE 2
1. For the purposes of this Convention the term forced or compulsory labour shall mean all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily.
2. Nevertheless, for the purposes of this Convention, the term forced or compulsory labour shall not include--
(a) any work or service exacted in virtue of compulsory military service laws for work of a purely military character;
(b) any work or service which forms part of the normal civic obligations of the citizens of a fully self-governing country;
(c) any work or service exacted from any person as a consequence of a conviction in a court of law, provided that the said work or service is carried out under the supervision and control of a public authority and that the said person is not hired to or placed at the disposal of private individuals, companies or associations;
(d) any work or service exacted in cases of emergency, that is to say, in the event of war or of a calamity or threatened calamity, such as fire, flood, famine, earthquake, violent epidemic or epizootic diseases, invasion by animal, insect or vegetable pests, and in general any circumstance that would endanger the existence or the well-being of the whole or part of the population;
(e) minor communal services of a kind which, being performed by the members of the community in the direct interest of the said community, can therefore be considered as normal civic obligations incumbent upon the members of the community, provided that the members of the community or their direct representatives shall have the right to be consulted in regard to the need for such services.
