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Comment by Mistletoe | Hacker News Reader

https://bigthink.com/wp-content/uploads/2022/02/GDPDebt2021_...

I’ve always found this infographic shocking. I don’t know how they can get out from under that and they keep going directly head on into it faster.

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Bank of Japan owns over half that debt.

Take out that debt and Japan's debt to GDP ratio falls below the US's. Now factor in how Bank of Japan's active surppresion of interest rates occurs by buying debt. If Bank of Japan keeps the 10 year at 0.25% then the net government debt will continue it's free fall.

The Bank of Japan is 55% (100% voting interest) owned by the government. I’ve seen this same scheme before in the Alameda/FTX news…

Those two situations are very different

Roughly half of the US's national debt is owned by the government too.

That figure includes the social security fund which is not included in the japanese figure. The social security fund is a liability, while the bank of Japan is fully a government asset.

The inflation does make all that debt cheaper, so that's one way.

Indeed. But there’s a reason why shorting Japanese government bonds is known as the “widowmaker” trade.

Giant majority of that is internal debt, so inflation is actually helping them.

Yields are positive and growing.

https://tradingeconomics.com/japan/government-bond-yield

What will happen when the interest on this debt gets too expensive? Further inflation and/or severe government austerity.

I think it helps to start with what you think “getting out from under that” means. Why do you think it’s a problem for Japan have this much debt to GDP?

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