Sunday, April 4, 2010

Let’s play the latest Japanese game!

It is called “how to bring oneself to fiscal suicide”

Japanese GDP : 480 trillion yen

Japanese Government Debt (only Federal) : 637 trillion yen (137% of GDP)

Federal Expenditure (2010) : 92.3 trillion
…of which ~20.5 trillion yen is debt servicing cost

Accordingly, the average debt servicing cost is (20.5/637 = ) 3.24%

Federal taxes and other revenue is 44.3 trillion yen, which means borrowing is 48 trillion yen.

Expenditure ex. debt servicing is 71.65 trillion, of which 48 trillion (roughly 2/3) is borrowed.

If you read the last line in the fact-box again, you realize that this is a real horror story. After paying interest on its debt, Japan has only 23.65 trillion yen left, yet it spends 71.65 trillion...

Read more over at Save Capitalism

What volcanoes, US bombs and earthquakes couldn’t do…

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