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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Is the party ticket issue the result of a sound whistleblower? In Japan, a spy paradise, you can do whatever you want.
The public prosecutor's office is said to be looking into the party ticket issue, but the main concern is the source of the leak. The original story is an article in the Japan Communist Party's Red Flag Newspaper dated November 6, 2022, but it feels strange that a specific group is being hit in a domino pattern like this. We have seen a pattern in the past in which scandals are discovered one after another within the administration, resulting in a decline in approval ratings. I always wonder who is leaking this.
Japan is said to be a spy paradise, but how many spies are there in Nagatacho? I have no idea how many people are from which country or from which country. Since GHQ was involved in the central government of Japan under trusteeship, some people say that by extension it has a thorough understanding of the system, and that the CIA and others continue to infiltrate and collect information. This is not to say that whenever problems occur in Japan, it is the work of spies, but rather that they could easily do it if they wanted to.
If another country is in charge of a scandal involving a Japanese politician, and it becomes inconvenient, should we leak it?
In China, I sometimes hear people say that Xi Jinping is a smart leader because he advocates eradicating corruption, but this is ridiculous. It can be said that the anti-corruption movement is what created Xi Jinping's dictatorship. Xi Jinping has monopolized real power by eliminating political opponents one after another on the grounds of corruption. In addition, no one can say anything because they have the public security thoroughly investigate corruption by all Communist Party members, have evidence gathered, and arrest any strange behavior. Corruption-free cases in China are rare, so it's like almost everyone is threatened.
From the perspective of these countries, it seems easy to infiltrate Japanese politicians' personal secretaries, public secretaries, accountants, etc. with intelligence agents. Is Japan already so suppressed in various areas that it cannot even enact an anti-espionage law? At the very least, there is no doubt that corruption is a no-no, but if espionage from other countries is allowed to do whatever it wants, it would be as if Japanese members of Congress were also held hostage.
It is necessary to solve the problem of political funding fraud, but if information management is sloppy, there will be no problem.
Yasuhiro Nakasone called the Japanese archipelago an unsinkable aircraft carrier - Japan's topography gave the US military an advantage.
Former Prime Minister Yasuhiro Nakasone referred to former President Ronald Reagan as an "unsinkable aircraft carrier." This is a metaphor for the strategic significance of Japan's topography and the presence of U.S. forces within the Cold War structure. Japan once fought a fierce war with the United States, but after the war it became a democratic nation. Conflict between the United States and the Soviet Union had already begun during World War II. It is said that the United States participated in the war in part to secure its voice within the framework of the postwar world. Both the Korean War and the Vietnam War occurred amid conflicts between the United States and the Soviet Union. The United States did not want Soviet power to reach the southern tip of the Korean peninsula. It is said that an agreement on the 38th parallel was reached as a secret agreement at the Yalta Conference. In this context, Japan became a base for the US military to defend East Asia.
Japan is actually a neighboring country to the United States in the sense that there are no countries separating them geographically. It takes about 3 hours to get to Guam by air. The Japanese archipelago has a unique topography, stretching from north to south, bordering Russia to the north, Kyushu to the Korean Peninsula, China, and the islands south of Okinawa to Taiwan. For the United States, the terrain that covered the Japanese continent was attractive for the defense of Asia, and this was completely consistent with Japan's understanding of national defense. Conversely, it may be said that if the US-Soviet Cold War had not occurred, Japan-US relations would not have been able to recover to this extent. After the collapse of the Soviet Union, China rose to prominence and Asia's defense lines moved significantly south. As expected, the Japanese archipelago occupies an important position in this band as well. Currently, they are working together within the framework of Quad. Japan also plays an important role in the Taiwan Strait issue, and in this way, the Japan-US relationship has developed amid changes in the environment surrounding Asia.
There was a Korean leftist presidential candidate who said that the Korean peninsula was divided by the occupation forces (GHQ), but in essence, South Korea is a country born within the Cold War structure. There was no way to stop the Cold War structure, neither in Japan nor, of course, in South Korea. I can't believe my ears when I hear statements that deny this very upbringing. In fact, if South Korea had not come under GHQ's trusteeship, it would have simply been unified with North Korea. A democratic country forms the basis of South Korea's national ideology, and even if we lament the separation from North Korea, which has a completely different social system, nothing will be achieved by blaming others. . What can we independently do for the world? That always seems to be missing.
How many natural resources are there in the waters near Japan? Possibility of Japan including EEZ.
Trauma of Japan, a country without resources
Japan's area is not small
Is Japan 52.4% of mainland China?
Rare earths, oil, these are just the beginning
Cabinet Secretariat “The Future of the Sea”
Are undersea resources a treasure trove to save Japan?
Japan is in a state where it can be said that marine resource development is almost untouched. As a country lacking in natural resources, it relies on foreign sources for many natural resources, including oil. During World War II, Japan was surrounded by ABCD as a country with no natural resources, and was in a situation similar to a food raid. They lost the war due to America's overwhelming amount of supplies. One cannot help but wonder why marine resource development did not progress after the war. Since we lost the war because we didn't have the resources, there may be many people who argue that searching for resources means starting another war, but this is a completely different story.
Japan's land area is 380,000 km2, ranking it 62nd out of 196 countries in the world. Japanese people tend to think of Japan as a small country because they tend to focus on top-tier countries such as the United States, China, and Russia, but Germany, Finland, and Poland are smaller in area. However, Japan is a maritime nation. When looking at the total of territorial sea, contiguous zone, and EEZ, Japan ranks 6th in the world in terms of ocean area with 4.47 million km2. And if you add the extended continental shelf, it is 4.65 million km2. If Japan's land area is added to this, the area that Japan can independently mine is 5.03 million km2.
China is covered by countries such as Japan and Taiwan, and there are few oceans that China occupies. That's why they dream of expanding into the ocean, but China's land area is 9.6 million km2, and in fact, including the sea, Japan has about 52.4% of mainland China. is. Because China has a large land area, natural resources and oil are mined. However, Japan's seabed resources are still unknown.
In 2018, researchers from Waseda University and Tokyo University discovered that hundreds of years' worth of global demand for rare earths, which are essential for manufacturing precision equipment, is found on the ocean floor around Minamitorishima in the Ogasawara Islands. This was discovered through the team's investigation. A research team from Ibaraki University and Hokkaido University has announced that one of the world's largest oil fields may lie dormant off the coast of Ibaraki Prefecture's Goura coast in 2020.
Cabinet Secretariat Ocean Policy Headquarters Secretariat “The Future of the Sea” Excerpt
The Basic Law on Ocean Policy was enacted in April 2007 and came into effect in July of the same year. The Basic Law on Ocean Policy outlines the basic philosophy of harmonizing the development and use of the ocean with the conservation of the marine environment, as well as the responsibilities of the national and local governments. It also stipulates that a Basic Ocean Policy Plan be established approximately every five years, and that the Ocean Policy Headquarters, headed by the Prime Minister, be established in the Cabinet. The current Basic Plan on Ocean Policy, which was approved by the Cabinet in April 2013, clarifies ``the vision of Japan as a maritime nation'' and sets out initiatives that should be prioritized in light of changes in the social situation regarding the ocean. and indicates the direction of ocean-related measures. It also specifically describes the efforts that the government should comprehensively and systematically implement over a period of approximately five years in the 12 areas specified as "basic measures" in the Basic Act on Ocean Policy. The existence of energy and mineral resources such as oil, natural gas, methane hydrate, and submarine hydrothermal deposits has been confirmed in Japan's territorial waters, EEZ, and continental shelf, and the possibility of Japan becoming a resource superpower is hidden.
The 2007 Basic Law on Ocean Policy was formulated during the first Abe Cabinet, and Japan's exploration of seabed resources went into full swing. What if Japan becomes a resource-rich nation? I would never have thought of that. Because Japan is a small country... No. There is a high possibility that there will be a breakthrough in undersea exploration. There may come a time when Japanese people don't have to work so hard.
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.
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.
