Are the Japanese as irrational as they seem?
As the Bloomberg article below recounts, Liberal Democratic leader Shinzo Abe, expected to win the upcoming Japanese elections, is calling for unlimited money printing and more fiscal stimulus.
Does this sound familiar? It should. Japan leaders have sounded like stuck records ever since the Crash of the late 1980’s. Over two decades have passed since then and Japan has just gotten worse and worse. Government debt has soared to unbelievable levels, many times GDP. Taxes today barely cover interest on government debt plus social security payments.
Wouldn’t you think that someone in Japan would start to figure out that this isn’t working, that the government has been destroying wealth, not creating it, for all these years.
But the same stuck record continues.
This does not bode well for the US. We are only partly down the Japanese road. Will we follow the Japanese all the way down this rabbit hole? Will we ignore the abundant evidence that money printing and stimulus create bubbles and busts, not sustainable prosperity?