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.
「国の財務書類」令和3年度 財務省 (licenced under 財務省)
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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[related article]
Constitutional Democratic Party member Konishi continued to complain at ABEMA TV that there was no legal basis for former Prime Minister Abe's state funeral.
Opposition party member developing original theory
It is clear that the Cabinet decides on national ceremonies
Clearly answered in parliamentary questions
Opposition parties' opinions should be as good as their approval ratings
The media mass-produces inequality of speech
Congressman Konishi of the Constitutional Democratic Party continued to complain on ABEMA Prime that there is no legal basis for former Prime Minister Abe's state funeral. He developed his own theory that the ceremonies performed by the state in the Cabinet Establishment Act referred to the ceremonies performed by the imperial family.
Looking at the Cabinet Establishment Act, Article 4, Paragraph 3, Item 33 states, ``Matters related to national ceremonies and affairs related to ceremonies and events conducted by the Cabinet (excluding matters that fall under the jurisdiction of other ministries).'' It is written. The Imperial Household Ceremonies set out in the Imperial House Law are interpreted to be included in this, and Article 7 of the Constitution states, ``The Emperor, with the advice and approval of the Cabinet, shall perform the following acts in matters of state for the people.'' It becomes.
This is done with the advice and approval of the Cabinet under the Cabinet Establishment Act. In other words, nowhere does it say that the national ceremonies specified in the Cabinet Establishment Act refer only to ceremonies of the imperial family.
He asked a question in the Diet about the legal basis of the cabinet decision for state funerals, and Prime Minister Kishida clearly stated, ``Holding a state funeral, which is a national ceremony, based on a cabinet decision, means that the cabinet has decided to conduct a national ceremony.'' This is included in the function of administrative power, and Article 4, Paragraph 3, Item 33 of the Cabinet Office Establishment Act clearly states that the Cabinet Office is responsible for affairs related to national ceremonies. I think it is possible, as it is clear in the law that the performance of national ceremonies that include national ceremonies is included in the functions of administrative power.''.
I wonder what the media means by equality of reporting. It is said that reporting the voices of opposition parties equally means not reporting only the opinions of a particular political party, but is reporting the opinions of opposition parties in the same manner really equal reporting equality? . According to opinion polls, even though the largest opposition party is the Nippon Ishin no Kai, it only has about 6% of the vote, while the Constitutional Democratic Party has about 5%. It is hard to believe that these opinions are represented by the number of seats that stand against the ruling party, and it is far from possible that they represent the voices of the people. In other words, reporting should be around 5% to 6% of the total, which would also be consistent with the meaning of equality.
On the contrary, Japan's current media outlets report on the claims of these opposition parties more than they do on the claims of the ruling Liberal Democratic Party. Recently, the opposition parties have become weak and are making a fuss by simply making counterarguments and making a fuss as if it were a flaming tactic, and the media, whose audience ratings continue to decline, are taking advantage of this to make numbers, which seems to be creating this inequality. appear. The media should mainly report the opinion that the Cabinet decision to hold a state funeral based on the Cabinet Establishment Act is legal.
constitutional monarchy A country with an imperial or royal family is not a presidential system.This is because it is a constitutional monarchy.The president will be the head of state.Therefore, countries with imperial and royal families adopt a parliamentary cabinet system if they are democratic.Koreans often say that Japan is a democratic backward country because it does not directly elect its leader.I was surprised to hear that even a university professor who is Korean said such a thing.Britain, the birthplace of modern democracy, is also likely to become a backward country.
Japanese cameras sweeping the The reason why Japanese cameras are taking over the world market is because of their sensors and lenses.These are the two properties of digital cameras.Light must not be refracted or diffusely reflected inside the lens, and the surfaces must be uniform.This affects the amount of light taken into the camera.
A lens with a high F value is dark and cheap, and if the F value falls, it takes in light and becomes expensive.The sensor is the one that receives the light taken in to convert it into digital data.The smartphone lens is close to the sensor and doesn't seem to have much effect, but it still changes.A single-lens reflex camera used for TV reporting and News paper,Magazine and so on or a lens with a high F value is useless.
That's why the No Japan movement in Korea is filmed with a Japanese camera.
Quad's strategy is geopolitically rational; simply dispersing the Chinese military will give it an advantage.
China causing border problems in all directions
Military expenditure is just the total amount
Regional dispersion reduces military strength by half
Chinese encirclement should be strengthened
China has long borders and its strategy should be to engage in peaceful diplomacy with neighboring countries, but for some reason the opposite is true for that country. In that respect, the United States is smart and has formed a North American alliance with Canada and Mexico, and among the countries with which they share borders, I think Russia is the only hostile element.
China is so selfish that it is happy to make enemies in all directions, but Quad is outwitting them. Comparing military expenditures by country is helpful, but it is on a different level from practical ability.
In large countries, military power is dispersed. Will Yunnan's soldiers and tanks be able to participate in the fighting in Fujian? Even if it is counted as military expenditure, it is not a real military force.
If Japan, the United States, and Taiwan cooperate in the event of a Taiwanese emergency, many Chinese forces will head there, but what will happen if the Indian army invades the Kashmir region during that time?Australia, Vietnam, and the Philippines will suppress the Spratly Islands. be able to.
South Korea's geographical advantage in the Quad lies in its operations in the Northeast, but Moon Jae-in seems unable to understand this at all. In the event of a Taiwanese emergency, it would be a good idea for countries with border issues with China to close their borders one after another.
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.