Japan's Severe Recession May Last 3 Years

[alephnull]

exindguy said:

alephnull said:
I would like to point out that GDP growth figures for the Japanese economy are not directly comparable to that of most western countries (except Italy) thanks to demographics. The Japanese labor force is actually strinking so it's possible for the average person's living standard to go up with 0% growth.

Wouldn't it go down since the taxbase is shrinking and the society is now, age-wise, top heavy? Less people paying in means, in theory, less tax dollars to dole out on anything the government wishes to spend money on, from roads to medicine.

This is becoming a huge problem for any developed country with a heavy entitlements (social security; socialized medicine; etc.) burden: you either slash those entitlements or you jack up the taxes on the younger generations to pay for it all, both of which lead to a lower standard of living.

On the 'upside' Japan has a lot of experience with recessions: they pretty much had one through the width and breadth of the 90s.

GDP is a measure of the size of the pie. If the size of the pie doesn't change and yet there are less people to feed then everyone gets more pie.