{"id":23202,"date":"2017-03-09T20:19:34","date_gmt":"2017-03-10T01:19:34","guid":{"rendered":"http:\/\/olduvai.ca\/?p=23202"},"modified":"2017-03-09T20:19:46","modified_gmt":"2017-03-10T01:19:46","slug":"japans-demographic-time-bomb-keeps-ticking","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=23202","title":{"rendered":"Japan’s Demographic Time Bomb Keeps Ticking"},"content":{"rendered":"
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Japan’s Demographic Time Bomb Keeps Ticking<\/a><\/h3>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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When I warn about the\u00a0fiscal and economic consequences<\/a>\u00a0of America\u2019s poorly designed entitlement programs (as well as the impact of demographic changes), I\u00a0regularly suggest<\/a>\u00a0that the United States is\u00a0on a path to become Greece<\/a>.<\/p>\n

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Because of\u00a0Greece\u2019s horrible economy<\/a>, this link has obvious rhetorical appeal.<\/p>\n

But there\u2019s another nation that may be a more accurate \u201crole model\u201d of America\u2019s future. This other country, like the United States, is big, relatively rich, and has its own currency.<\/p>\n

For these and other reasons, in\u00a0an article<\/a>\u00a0for\u00a0The Hill<\/em>, I suggest that Japan is the nation that may offer the most relevant warning signs. I explain first that Japan shows the failure of Keynesian economics.<\/p>\n

\u2026ever since a property bubble burst in the late 1980s, Japan\u2019s economy has been in the doldrums, and its politicians deserve much of the blame. They\u2019ve engaged in\u00a0repeated binges of so-called Keynesian stimulus<\/a>. But running up the national credit card hasn\u2019t worked any better in Japan than it did for President\u00a0Barack Obama<\/a><\/span>. Instead of economic rejuvenation, Japan is\u00a0now saddled with record levels of debt<\/a>.<\/p><\/blockquote>\n

In other words, Japan already is\u00a0a basket case<\/a>\u00a0and may be\u00a0the next Greece<\/a>. And all this foolish policy has been\u00a0cheered on<\/a>\u00a0by the IMF.<\/p>\n

I then highlight how Japan\u00a0shows<\/a>\u00a0why a value-added tax is a huge mistake.<\/p>\n

Japan\u2019s politicians also decided to impose a value-added tax (VAT) on the nation. As so often happens when a VAT gets adopted, it turns into a money machine, as legislators start ratcheting the rate higher and higher. That happened in Europe back in the 1960s and 1970s, and it\u2019s\u00a0happening in Japan today<\/a>.<\/p><\/blockquote>\n

And regular readers know\u00a0my paranoid fear<\/a>\u00a0of the VAT taking hold in the United States.<\/p>\n

But here\u2019s the main lesson in the column.<\/p>\n

The combination of demographic changes and redistribution programs is a recipe for fiscal crisis.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Japan’s Demographic Time Bomb Keeps Ticking When I warn about the\u00a0fiscal and economic consequences\u00a0of America\u2019s poorly designed entitlement programs (as well as the impact of demographic changes), I\u00a0regularly suggest\u00a0that the United States is\u00a0on a path to become Greece. Because of\u00a0Greece\u2019s horrible economy, this link has obvious rhetorical appeal. But there\u2019s another nation that may be […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[14989,14990,14991,452],"class_list":["post-23202","post","type-post","status-publish","format-standard","hentry","category-economics","tag-daniel-j-mitchell","tag-demography","tag-foundation-for-economic-education","tag-japan"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23202","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23202"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23202\/revisions"}],"predecessor-version":[{"id":23204,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23202\/revisions\/23204"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23202"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23202"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23202"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}