> How do you know that this isn't a symptom of overaccumulation - of
> profitless investment, of capacity-building for its own sake - rather
> than strength? Even in the late 1980s, new capital investment in
> Japan had a return of close to zero or even less than that, yet
> they've continued to invest.
If manic bubbles can go on for decades, manic overaccumulation of industrial assets can, too. They're probably two sides of the same coin, actually.
> When you run up the debt, your creditors get more political power.
> That hasn't been a problem for Japan, with its large stock of
> domestic savings, but as a general strategy, it may lack promise.
Well, you'd have to tax the hell out of aforesaid creditors, obviously. How about a 2% tax on every bond trade? Let there be one, two, many Tobin taxes!
-- Dennis