Christian wrote:
> Sure, but the debt/GDP measure doesn't say anything about Japan's ability to
> pay its debts. The structural deficit in Japan at the worst point in the
> recession so far--1996--was not significantly higher than the U.S.'s highest
> structural deficit in the 1990's and no one ever predicted cataclysm for it.
> And it's been lower than Germany and France.
I thought the structural deficit is a measure of what the deficit would have been had there been full employment however defined. What this has to do with the sustainability of more deficit spending (already jeopardizing the credit standing of the Japanese govt) is unclear to me.
>
> So, after all "rescues" of one sort or another that capital has managed for
> itself over the last 500 years, you really think the next depression will be
> the killer? How so? Why will it be different than any of the other crashes?
The rescues did not stop the return of recessions, five or seven, after 1970. The next crash will be different because there is less wiggle room for govt macroeconomic stabilisation.
> pointing to the payments imbalance for at least that long. My question to
> you is, why do you think the crash is imminent now--I mean like now as
> opposed to a year or 6 months ago?
No idea when the crash will happen. My bet remains Japanese withdrawal from dollar denominated assets for the purposes of emergency capitalisation of their banks.
> question: Why now, as opposed to 6 months ago? Or do we just keep saying the
> crisis is imminent until it happens?
What I say is the contradictions of capital have not been overcome.
yrs, rakesh