So let's get real and look at Japan as an instructive warning for what may lie ahead for America.
Hopefully, Japan's present isn't in our future, but the future is the future and therefore not knowable in the present
You think China has problems? Look at Japan is both an eye opening and troubling story:
"High debts, old population and low productivity are huge obstacles to growth.
If you think China has economic problems, take a look at Japan where the challenges are arguably far greater.
The top priority is restoring robust growth to an economy that has been trapped in deflation and decay for 20 years . . . .
During this prolonged decline . . . living standards have steadily eroded so that per capita incomes today are 10% below the level of 1990. Worse, because of low productivity, massive government debt, a shrinking population and aging work force, . . . Japan’s economy is so constrained that its growth potential is below 2% annually. . . .
As recently as 1990, Japan was a manufacturing powerhouse accounting for nearly 10% of global exports, number three behind Germany and the United States. China — still in the early stages of its market-based reforms — was at 2%. Today, as the chart below illustrates, Japan accounts for a mere 4% of global exports, far below China’s 12%.
Japan’s loss of competitiveness has not been mitigated by the big decline in the yen’s exchange rate. Unlike China’s, whose currency — even with this week’s devaluation — is up 25% over the past decade, the yen is down 35% in just the past three years. And still Japan’s economy is expected to grow by only 1% this year. . . .
The country’s huge fiscal deficit and accumulated debt constrain any effort to boost government spending.
Japan’s debt, as a percentage of output, is far greater than that of Greece and the biggest in any OECD economy. At 230% of gross domestic product . . . . Debt service is already the biggest expenditure in the budget and that percentage will rise when interest rates go up....
While Japan’s educational system is highly regarded, its culture has become increasingly bureaucratic and less supportive of entrepreneurs. . . . While several Japanese companies retain global leadership they have increasingly moved production off shore."
In the late 1980's, it looked like the Japanese economy was invincible.
'Game over' was the widely predicted outcome, and Japan would emerge as the clear winner.
Now Japan is the land of high debts, an aging population and low productivity.
Well, it does to me, too.
Let's not go there.
That's neither a happy thought nor a prosperous place to live.