> options. Now its federal debt, a nearly $6 trillion behemoth that
> makes America's 1980s debt seem small in comparison, is so high that
> industry-boosting tax cuts are no longer possible either.
Just to supplement what Charles said: (1) Japan's GDP is around $4.5 trillion, and there's absolutely no relation between a country's total debt and its economic strength. The US debt was 200% of GDP right after WW II, but interest rates were kept low so servicing this debt wasn't a problem. (2) Japan's exporters have been hammered by the semi crash, but basic industry has held up surprisingly well, and profit rates have been climbing since the trough of 1998; stocks are down, but dividends have been pretty stable. (3) Japanese banks are capitalized at around 8-10%, according to The Banker and most OECD stats I've seen. (4) Japan's economy is built on the foundation of 2 trillion EUR of net foreign assets, plus 1 trillion EUR of savings in the national postal bank; the US would have to default before Japan would ever default. (5) Japan's public debt doesn't include the net value of the Government's vast land holdings. (6) Japan's keiretsu are beginning a vast restructuring program of merging industrial firms and entering high-end service markets, which will start generating enormously lucrative payoffs in 3-4 years.
-- Dennis