| Mr Khan said: I wouldn't want it to get to this point, but i would respond by saying look to Japan, who has run under a far higher level of debt -> GDP for almost 20 years now, and even managed to survive having to take most of the country offline economically in the earthquake without having to default Larger economies can play debt games that smaller economies cannot, though again no-one should want to emulate the Japanese case |
There is a significant difference in the structure of Japan's debt vs. Americas. Their debt is almost entirely financed by private entities inside Japan, and are therefore less susceptible to bond ratings than America's debt which has a significant amount of financing via overseas buyers. Credit agencies are finally starting to turn on Japan since they were the archetype for American's stimulus plan (pouring trillions into programs to stimulate the economy to no avail and keeping the elderly happy via rampant social security spending), but its been much slower due to their ultra-low interest rates on said debt.
Back from the dead, I'm afraid.
