Comment by adventured | Hacker News Reader

Comment by adventured | Hacker News Reader

"Japanese people aren't having enough kids to sustain a healthy economy."

The premise of this article is absurd, and flat out wrong.

Japan's big problem is debt, currency destruction, a collapsing standard of living due to the prior two items (zero savings rate, trillions in loans to the government being paid back in debased currency, high taxes, ~45% of tax revenue being eaten by debt servicing costs, and so on).

All of that debt is eating a large portion of the available capital for investment. Without enough private sector investment, you can't grow an economy, you can't bring in higher tax revenue, and so on.

You don't primarily grow an economy through massive reproduction anyway, you do it through innovation and productivity gains. If population gains were the key to massive economic gains, Nigeria would be a leading economy, and Sweden / Denmark / Norway / Switzerland would have spent the last 20 years languishing.

Or take Germany, their population has hardly moved in 40 years. Their GDP has increase nine fold in that time (and is still a dramatic increase accounting for inflation).

Japan's nominal GDP hasn't moved in 20 years. In that time their population has remained essentially flat (+2m). In those same 20 years, Germany's population has actually declined. And in that time Germany boosted its GDP by 77% roughly. By this article's logic, Germany's economy should have spent the last 20 years in dire condition.

The age of robotics is upon us. The last thing you're going to want in the next century is a vast oversupply of human labor. Japan should allow their population to continue contracting, while they focus on replacing human labor with robotics and artificial intelligence / software.

That's where a large portion of the economic growth in the next several decades is going to come from, the vast productivity gains to be found in those two areas.

Well, the economy might sustain, but the pension system is surely doomed. Which means some drastic political fluctuations, as major (and active) voters will be stripped from their expected (and promised) wealth. And any political disturbance when you are a 3rd economy in the world with 200% GDP in debt might blow up in World's face easily.

If this debt is ever to be paid, this'll be surely done partly with funds now parked at US treasuries. And, of course, any economic issues in Japan will hit China hard as well - which is another major holder of US's debt. So, top-3 biggest economies in the World might go down in instance, sinking others with them.

Japan might try to compensate that by active foreign workforce infusions (like Europe do), - but they are a really closed society still, and their foreigners count is just under 2 mil (compare with 16 mil for, say, Russia, with comparable, though much younger on average, total population size), which is nothing.

So the problem is not that they don't have enough people. The problem is that they won't have enough people to form a sizeable enough tax base in the future, given demographic trends and the situation of debt/currency destruction. The demographic trend isn't the underlying cause, but it comes at a particularly bad time.

You don't need more people, you need economic growth via capital investment, innovation, productivity gains, and government that isn't wildly fiscally irresponsible.

Again, see: Germany

If your theory were true, Germany would be in terrible financial trouble just like Japan. Their population decline over the last 20 years would have reduced their financial tax base, but the exact opposite happened.

You do not need more people to grow your financial tax base.

Also, without productivity gains and a competitive private sector when it comes to innovation (see: South Korea and China taking Japan's growth by out-competing them), an expanded labor pool will not boost your tax base, it'll make everything worse - you'll still have the social welfare costs of an ever greater number people, meanwhile you'll primarily stagnate existing labor through wage pressure that comes with more workers.

You don't need more people, you need economic growth via capital investment, innovation, productivity gains, and government that isn't wildly fiscally irresponsible.

A) You're mostly preaching to the choir. B) If more economic growth with a declining tax base is good enough, then more economic growth with an increasing tax base would be better. Also, if insufficient economic growth with a stable population is bad, then insufficient economic growth with a declining tax base is clearly worse.

You do not need more people to grow your financial tax base.

I never said that. Please get off your soapbox and read the comments you are replying to.

It's not just about productivity. As the article says,

"People in Japan tend to live a long time; elderly Japanese are expensive to care for because they spend so many years in retirement and because they're accustomed to a high standard of living and medical care. For any economy to stay healthy, there need to be enough taxpayers to support all the retirees. But Japan's population is shrinking and aging simultaneously, which means that the number of old people is skyrocketing just as the base of taxpayers shrinks."

When you adjust for Japan's fraudulent age accounting, they're not living much longer than Germans. Maybe 1 to 1.5 years tops.

It's just another bogus excuse for the extraordinary mismanagement by the Japanese government over the last 25 years.

Care to explain "Japan's fraudulent age accounting"?

Japan is often claimed to have "lost" a lot of seniors who have actually died but were never recorded.

The explanation for this has ranged from welfare fraud (relatives continuing to collect on the dead) to simple incompetence.

But either way AFAIK there is strong evidence that quite a large number of dead people slip through the cracks and are never marked as dead, at least for statistical purposes, which inflates life expectancies.

Or, concisely: there's a reason GDP/capita is a widely used metric.

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