he Economist (April 8)
2010/ 04/ 08 by jd in Global News
Japan is “sleepwalking towards disaster.” According to the Economist, Japan has comfortably ignored major problems for two decades, but this situation cannot continue. With the world’s largest public debt-to-GDP ratio of 190%, Japan will face major hurdles. Already, the cost of borrowing (44 trillion yen) exceeds tax revenues (37 trillion yen). By 2015, Japanese investors may not be able to buy up all of the bonds the Japanese government needs to issue. Overseas investors will demand much higher returns. This increased risk premium could be paralyzing. Only bold action now can avoid a very dangerous situation.
