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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World's First Anti-Racism Bill - Proposed by Japan, a Permanent Member of the League of Nations.
I wonder if Japan appears in world history around the time of the Sino-Japanese War. The world took note of the great accomplishments of the eastern island nation, and the West, which had considered China a great power, came to call China the ``sleeping lion.''
The next great achievement was the Russo-Japanese War. Heihachiro Togo, who won the Battle of the Sea of Japan, was featured on the front page of newspapers around the world, and is said to be the first Japanese person to be featured on the front page of a newspaper around the world. After that, Japan rose to the forefront of the world and became a permanent member of the League of Nations in 1919.
In 1919, Japan became the first country in the world to propose a bill to eliminate racial discrimination at the United Nations. Already during this period, Japan objected to the West's domination of Asia. Former Foreign Minister Nobuaki Makino criticized the racial discrimination caused by Western countries' colonies in various parts of Asia. (Nobuaki Makino: second from the left in the front row of the photo)
This is the world's first international organization to introduce a bill on the elimination of racial discrimination, with two representatives from France and two from Italy in favor, 11 from Greece, the Republic of China, Portugal, Czechoslovakia, the Kingdom of Serbs, the Kingdom of Croatia, Slovenes and Japan, and the United Kingdom against it. ・There were 5 people from the United States, Poland, Brazil, and Romania, so there was a majority in favor.
Many Japanese people think that the elimination of racial discrimination is a concept developed from the West, but in fact, it was Japan that first called for the elimination of racial discrimination.
At the time, Britain was abducting black people from Africa and trading them as slaves to the Americas. America used black slaves to grow cheap agricultural products and export them to countries around the world. The American representative argued that this was a no-go because it was not unanimous. Is there such a thing as a principle of unanimity among the 16 members?
Makino once objected, saying that the bill could be passed by majority vote, but the bill was rejected in accordance with the principle of unanimity in the United States, which was already a superpower at the time. This was nine years after the annexation of Japan and Korea and 22 years before the start of the Greater East Asia War.
South Korea continues to say that it was discriminated against and deprived of by Japan, but Japan was fighting in international organizations on a completely different scale. The annexation of Japan and South Korea and the annexation of Taiwan are assimilation policies that are completely different from Western-style colonies. Assimilation policy means that the Japanese, Koreans, and Taiwanese living there have equal rights and are subject to the rule of law.
The Greater East Asia War was a war between Japan and the white countries that ruled Asia, based on the idea that all Asian countries should maintain their independence and co-prosperity. The Greater East Asia Co-prosperity Sphere concept was not something that suddenly appeared on a whim.
Korea claims that it suffered racial discrimination during the annexation of Japan and Korea, but it seems that they do not really understand what racial discrimination at that time meant.
TSE market capitalization returns to number one in Asia - Expectations for Japan's competitiveness after withdrawal from Chinese investment?
On the 11th, the total market capitalization of stocks listed on the Tokyo Stock Exchange exceeded that of China's Shanghai Stock Exchange. It seems that the TSE has returned to the top spot in Asia for the first time in about three and a half years. Various things are being talked about, including a move away from investment in China and expectations for Japan's competitiveness to recover. In the first place, the current strange international situation is the result of developed countries investing in dictatorial countries such as China and Russia.
In 1973, the G7 once accounted for 65% of world GDP. That's the GDP of only seven countries. This was seen as a monopoly on the world's wealth, and problems in developing countries were discussed. At that time, the world was also in the era of the Cold War, but the Cold War itself was at least a better era than now. Economic and political exchanges between communist and capitalist countries were closed off and blocked by a barrier called the Iron Curtain. Russia and China are calling for a return to the Cold War era, but is that really the case? One could argue that the Cold War era was the era with the least number of wars in the world.
After the collapse of the Soviet Union, the countries of Eastern Europe collapsed one after another. China also pursued a path of liberation and reform, aiming to become an open nation. After the fall of the Berlin Wall, the world went crazy and thought the era of tension was over, but that was not the case at all. The loss of balance in the world has led to localized conflicts. Issues that were not highlighted during the Cold War era have been exposed as tensions have eased. Various things have been said about this, and while that may be true, I believe that it is essentially a matter of money.
What began with the collapse of the Cold War was global capital, or so-called globalism. Globalists are talked about as a conspiracy theory on social media, but there is no interest in knowing who is behind it. The problem is that the era when business and investment in authoritarian countries began can be thought of as the collapse of the Cold War. Did they simply think that the world would turn to democracy once communism fell? What is clear today is that the country has spent decades cultivating a state in which its domestic market is opened up to the capitalist state as much as possible, and wealth is distributed by a dictator.
The Cold War era was a great time. It was a time when the world was divided based on ideology, and it was a rational and peaceful time. The world should once again create an iron curtain of democratic and non-democratic countries. We no longer need to care how much wealth the G7 makes. Only countries that choose the democratic state form can receive democratic investment. As long as we continue to be a dictatorial nation, we should just live with the economy of dictatorial nations. You should rethink that. However, there will be some remorse for the times when we grew a nation that grew fat and threatened us with weapons.
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.
Japan is the only country of color to successfully modernize (industrial revolution).
Japan is said to be the only country among people of color that succeeded in modernizing through the industrial revolution. So why was only Japan able to succeed?
Japan has been isolated from the rest of the world for over 200 years, and we are generally taught in school that modernization began with the opening of the country. What exactly is the industrial revolution? The industrial revolution can be thought of as a power revolution.
Watt in England improves the steam period and creates a machine that converts the power of steam into rotary motion. This was a revolutionary invention at the time. He will be able to transmit rotational motion to various gears and realize complex movements in various locations. So, what was the machine like up until then? It was similar to how humans and cows rotate their shafts, or when they step on a loom with their feet to obtain rotational motion.
This is the power of steam, and if you keep the fire burning, you can get an output many times greater than human power. What this achieves is mass production of products.
Until then, it was called a cottage craft industry, and as the name suggests, people made things by hand, but from now on, we will enter an era in which machines will be making large quantities of the same items.
This is the industrial revolution. Products manufactured in large quantities are cheaper and become popular among various classes. Steam locomotives also provided the infrastructure for transporting these large amounts of goods. From this era, the demand for coal to generate overwhelming thermal power increased explosively.
So, why did Japan succeed in the industrial revolution? Japan already had the technology to make these machines by watching and copying. During the Edo period, techniques were honed and improved as a traditional craft during the apprenticeship system, and the sword culture continued for a long time, making iron processing technology one of the best in the world. has in the metal processing field. Unlike human power, steam engines produce overwhelming power, so wooden machines would easily break. In other words, even the smallest parts of various machines must be made of metal and assembled. When Japanese people saw Western industrial machinery, they may have simply thought, ``Oh, I think I could make something like this.''
One reason is that Japanese people are good with their hands, but clocks were the most precise gear-based machines of the time. It is said that Japanese clocks were already created in Japan during the era of Tokugawa Ieyasu. Currently, Japanese clocks have a reputation for being the most accurate and unbreakable in the world, but these technologies were not invented yesterday.
■English subtitles
There is another thing that Japan achieved that was necessary for the industrial revolution. It is a departure from the feudal system. In the West, a civil revolution had already taken place, and the industrial revolution began more than 100 years later. Free citizens were already active during the Industrial Revolution, and their lives were not tied to feudal lords or land as in the feudal system.
In other words, when wealthy people at the time started a company that mass-produced products using industrial machinery, they could recruit and hire employees.
This is the proletariat, and a mobile labor force is essential to the industrial revolution. The Meiji Restoration was truly a revolution that destroyed the feudal Edo shogunate system and created a civil society.
The Japanese at the time were able to accomplish something that had never been seen before in the world: they simultaneously carried out an industrial revolution. Then, if you think about why other countries of colored people were unable to modernize, it can be said that it is because these two points were not met. One is metal processing technology. The other is the formation of a civil society, which means breaking away from feudal society.
In the first place, Southeast Asian countries and other countries of color were all colonized by the West from the latter half of the 15th century, so it is difficult to imagine that the countries under colonial rule would be able to achieve the industrial revolution that first occurred in the West in the late 18th century. It's impossible to say so. For example, what if we look at the neighboring countries of China and the Korean Peninsula?
China also has a sword culture, and has a long history of using iron tools. However, they were unable to break away from feudalism. As for the Korean peninsula, Korea did not have the technology to make needles and wheels, so they imported them from China. What this means is that the needle meant that people didn't have fine metalworking skills, and the wheel meant that people didn't know how to bend wood into rings, so they didn't know how to move things. It was carried on the back of a person, carried by a person, or placed on their head. In other words, it is impossible to improve the efficiency of infrastructure, and in the first place it is impossible to make the gears in industrial machinery or perform detailed metal processing.
What was fatal on the Korean peninsula was that the class system was exactly as it was before the Middle Ages, and it was a distorted society with 40% slaves, so talk of a mobile labor force was a thing of the future. . In order to firmly protect this old Korean society, the aristocratic class, the yangban, completely eliminated various reforms for modernization. It can be said that both were fatally lacking.
Only 27 years after the Meiji Restoration, Japan defeated the Qing Dynasty, which was considered a major power, and 10 years later defeated Russia. After World War I, Japan sat at the table at the center of the world as a permanent member of the League of Nations in 1919. This was only 51 years after the Meiji Restoration. In this way, Japan was the only people of color to achieve modernization, and the idea was to spread this wave to Asia.
Sun Yat-sen's Xinhai Revolution was made possible with Japan's support, and Sun Yat-sen, who founded the Republic of China, believed that Japan's Meiji Restoration was the cause of the Chinese Revolution, and that the Chinese Revolution was actually the result of the Restoration. I'm making a statement. During his exile in Japan, Sun Yat-sen took the name Sun Yat-sen and was a person who learned about Japan's modernization. There was a man named Kim Ok-gyun on the Korean peninsula, but the revolution in Korea ended in failure, and Kim defected to Japan. However, when he went to Shanghai, he was assassinated by an assassin sent from Korea. It is ironic that just four months after Kim Ok-gyun's death, the Sino-Japanese War began, resulting in the independence of the Korean peninsula and the beginning of reforms toward modernization.
As a result, China started the Xinhai Revolution in 1912, 44 years after the Meiji Restoration, and the annexation of Japan and Korea began 42 years after the 1910 Meiji Restoration. In fact, as Asian countries eventually achieved independence after the war, the process of modernization was necessary in any case, but it is worth noting that Japan was the only country of color to achieve this. However, it is clear that the modernization of Asia was derived from Japan's Meiji Restoration, and in this regard, China, the Korean Peninsula, and Japan, without exception, have recognized this important process within the theme of mod
Internationally important elections will be held in 2024 - Japanese politics will be greatly influenced by these.
2024 is X-year. The US presidential election will be followed by the Taiwanese presidential election, Russian presidential election, and South Korean general election. The Russian presidential election is likely to be a close call, but everything else will have a big impact on Japan.
In Taiwan's presidential election, the ruling Democratic Progressive Party has a slight lead, with the Kuomintang and People's Party trailing behind. The third party, the People's Party, has many points in common with the Democratic Progressive Party, but it is a strange party in that it receives political donations from China. There is no movement yet, but if the Kuomintang and the People's Party join together at the last minute, the Democratic Progressive Party will be completely defeated.
The Nationalist Party has made it clear that it will maintain the 92 common sense, which means that it will maintain the "one China principle." If pro-China forces win, the result will likely be the same as in Hong Kong.
South Korea's president is said to be a right-wing national force, but the majority of the National Assembly is left-wing and both Democrats. The majority of the National Assembly will be the pro-China, pro-North Korea, anti-American, anti-Japanese parties we witnessed during the Moon Jae-in era. If this party wins the general election, an anti-Japanese leftist president will be elected again in the next presidential election.
The big event in 2024 will be the US presidential election. If Biden, the Democratic Party of the United States, were to win here, the environment surrounding Japan would shift to the left, and Japan's cabinet would also become left-handed. China's One Belt, One Road initiative may end in failure, but the Free and Open Indo-Pacific concept advocated by former Prime Minister Abe will also become a mere shell.
On the other hand, if the Democratic Progressive Party wins in Taiwan, the power of the people wins in South Korea, and Trump becomes President of the United States, will Japanese politics become right-wing? At that time, the Indo-Pacific concept will progress and a prime minister will be needed to take over the initiative. Is today's Japan simply being swept away without being able to exert its influence even in Asia?
