by BurnTheShips 3 Replies latest jw friends
What the U.S. can learn from Japan’s failed experiment with “zombie businesses.” “After Japan’s asset bubble burst in the late 1980s, their economy took a sharp downturn, prompting government officials to try bailing out banks and investing in infrastructure, much like the activity and proposals floating around America today. The results were terrible.”
Lesson learned?
BTS
from the link you posted.
To counteract the lack of private investment, the Japanese government turned to large-scale infrastructure programs. They built roads, bridges, and airports, all with the goal of creating jobs and saving the economy. But it didn't work. Public debt skyrocketed (it is now higher than GDP), unemployment doubled, and the economy remained stagnant.
While private sector investment isn't totally stalled in America today, there is great uncertainty about what the government will do next, whether taxes will increase, and what future rates of return will be considering the Fed's rate-slashing binge. Foreign investment dollars are slowing as well, partially due to the global economic dip, but also because of errant policy.
To make matters worse, Obama is planning a Japanese-styled infrastructure investment project, with the goal of restarting the economy and creating 2.5 million jobs. But the plans are unlikely to encourage long-term economic growth, the jobs are not sustainable, and the spending will increase national debt.
And while some of Japan's infrastructure projects have served society, that value must be compared to what the private sector could have created with economic policies in place that encouraged free market activity. In other words, what are the unseen losses?
Still there are reasons to be optimistic. Not only does America have the Japanese lesson to study, we are in a much better position to act than Japan ever was. Despite Wall Street's massive losses, for instance, there is over $100 billion in private capital available now for investing in infrastructure. With a little forward thinking, we can unleash the greatest new wave of investment this country has ever seen-one that originates from the private sector, not from government planners focused on propping up the living dead.
maybe there is some hope.
purps
Still there are reasons to be optimistic. Not only does America have the Japanese lesson to study, we are in a much better position to act than Japan ever was. Despite Wall Street's massive losses, for instance, there is over $100 billion in private capital available now for investing in infrastructure. With a little forward thinking, we can unleash the greatest new wave of investment this country has ever seen-one that originates from the private sector, not from government planners focused on propping up the living dead .
Tax incentives. Tax cuts. There are trillions waiting on the sidelines right now. If there is an incentive to risk that money, to keep more of any possible profits, it will return to a more useful allocation. I read today about a calculation that was made that estimated that the national debt has exceeded the aggregate value of the entire country. Every asset. Technically, we are now bankrupt. More spending is not the way to go, and Japan's lost decade is a signal example.
BTS
I read today about a calculation that was made that estimated that the national debt has exceeded the aggregate value of the entire country. Every asset. Technically, we are now bankrupt. More spending is not the way to go, and Japan's lost decade is a signal example.
I agree. Today it is reported that Chrysler will "idle" from Dec 19 to Jan 19. Cars are not selling, there is a surplus. Production went over demand, it's quite simple. For whatever reason the demand is not there......the fact is...it's not there.
If everyone wised up and said.....hey, I do not need a new car this year, that could have been the cause for the demand to go down. They projected wrong and over produced. For years I have been saying........as I drive past lot after lot of acres of new cars,and not just where I live, in other cities. Why do we need so many cars? Who is buying all these cars? Apparently no one is now.
I really do not have an understanding of economics, but it seems we(Americans) could manage awhile off the surplus of all that we have produced for awhile.
I know it does not help the economy, but somewhere it has to balance out.
purps
