Japan Currently Has About $10.46 Trillion USD in Public Debt
In the United States, people look at the size of their government's debt and almost can't believe how big the number has become. After all, as of this afternoon, the US government owed a total of $11,951,614,681,840.55 in public debt. Public debt includes money that is owed to mutual funds, pension funds, foreign governments, American investors, etc. When you add in intragovernmental holdings (money that the government owes to programs such as Social Security), you are left with the oft-quoted debt number of $16.7 trillion.
That's a staggeringly high number.
Japan, on the other hand, hit a new milestone earlier in the year, as they officially passed the 1 quadrillion yen public debt mark. That's 1,000 trillion yen, or roughly $10.46 trillion USD.
Now, that's still about $1.5 trillion less than what the United States owes, but when you compare the debt to the size of each economy, Japan owes much, much more.
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This staggeringly high debt load figure has Japan's prime minister Shinzo Abe considering the possibility of raising the country's consumption levy from 5% to 8%, with another possible increase to 10% in 2015.
The enhanced levy would weigh on the country's growth, but the possibility of the country's books continuing to worsen are also casting a negative pall as well. It's the question that has befuddled many leaders over the past decade or so - how much austerity is too much?
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Japan has been able to fund their deficit spending over the past number of decades by turning to their own population. The Japanese are excellent savers, and many of the country's citizens have chosen to plow much of their savings into government bonds. The government has also embarked on an aggressive advertising campaign in order to tap the funds of its citizens.
However, the population of Japan is quickly aging, which is creating an even greater strain on the system, with some saying that the country will likely implode over the coming decades.
Filed under: General Knowledge
