CID1990 wrote:
SK- answer this for me, OK?
What we are doing right now with our stimulus spending.... in what way does this differ with the start of Japan's "lost decade"? I'll give you a hint: we are folowing Japan's roadmap exactly. Our recession is also mirroring Japan's. (It began in their real estate market which was heavily leveraged) Japan also had false indicators of economic recovery about a year after their first stimulus. (They ultimately had 10 of them, none of which were as big as our first. We need two more stimulus packages to equal the capital spent in Japan's 10)
What are we doing differently? How will we avoid a deficit that amounts to 200% of GNP, like Japan has now? In 5 years, tax rates will have to triple in order to balance interest payments on our debt. When corporate tax rates rise similarly, do you really think that jobs propped up by monopoly money will still be there?
Do you think that?
They aren't the same thing at all.......
Japan's stagnation in the '90's was caused by deep flaws in their economy which developed into a banking crisis. In the US in 2008... deep flaws in our banking sector led to a crisis in the whole economy. Most of US's nonfinancial corporations are healthy financially. That wasn't the case in Japan... the whole economy, every sector was a mess.
And, I believe Japan's stimulus did reverse the course of their recession. When Japan began pouring money into the economy, their GDP began rising. What slowed and stopped the GDP growth was when Japan began taking money out of the economy by greatly increasing taxes in the late '90's. (Yeah, I said increasing taxes was bad in that situaion
).
Pretty cool. 
