>
> On Tue, 7 Dec 1999, Daniel Davies wrote:
>
> > >Gross debt is already 130 per cent of
> > >gross domestic product, the worst in the Organisation for Economic
> > >Cooperation and Development, and rising fast.
> >
> > AAAAAAAARRRGHHH!!!! If I see one more repetition of this meaningless
damn
> > statistic, I swear I'll eat my own trousers in frustration. The Gross
debt
> > of Japan, compared to the flow of GDP, is a number which is utterly
> > uninformative about Japan's ability to pay its debts.
>
> It isn't? How come? And be gentle, it's my first time hearing this.
> But I'm eager to learn.
>
> BTW, what would be a good measure of an OECD country's (in)ability to pay
> its debts? Do you mean all that guff about 130 percent being such a bad
> thing for Italy and Belgium and Greece is just that, guff?
An anciallary point (to the one about public debt): Japan's "public" debt has really got FT's panties in a neoliberal wad (i.e., as Daniel said, this is a real obsession for this paper). They have been scratching their collective heads about the relative strength of Japan's bond market since September: they can't seem to figure out why the rest of the world considers Japan the safest sovereign debtor, when it's got all these suspicious liabilities, etc. (There was a commentary about this in the hard copy the other day--haven't found it on line.)
I don't know about Italy and Belgium and Greece--wouldn't the question with any OECD country (in addition to getting the actual public debt right) be productive capacity? Japan's ability to pay its debts for nearly fucking ever is in part a reflection on its potential output growth--in 1996, before the crisis, it was 5%. And what did I read, it was 8% or something for the last quarter? That bodes well for its ability to collect revenues and keep debt from getting out of hand.
Christian