Platform of My Learning

Article Memories vol.1 : 日本の財政が「絶対破綻しない」これだけの理由

Theme: 経済

Time: 約5分













   I think it is not suitable to have a mind that "paying off debts of the government” is a good thing and try to pay off all of the debts. There are 4 reasons I can tell.


   First, if Japan pays off all their government debt, they'll lose almost all their money, so to avoid that, someone else has to take over the debt. In other words, a new private loan equivalent to the government debt must be created.


   Second, It is impossible that the Japanese government will not be able to repay the Japanese yen debt, because it is the Japanese government that makes the Japanese yen in the first place, and it is impossible to say the government cannot "return" the "Japanese yen that they can make"  themselves. No matter how much debt they have, it's enough if they make it themselves and return it when they are asked to repay it.


   Third, It is practically possible to make and return the money by themselves, disregarding the bookkeeping in case of an emergency. The Bank of Japan buys and sells government bonds on the market in its daily business. If the number of people lending money to the government (such as banks) decreases and the price of government bonds becomes unstable, the government will take measures to buy government bonds sold in the market with the aim of stabilizing them. By doing so, it is possible to avoid the situation where the price of government bonds stabilizes and no one lends money to the government.


   At last, In any worst case, the Bank of Japan will lend money to the government as a "lender of last resort(日銀特融)". From this, it can be said that the Bank of Japan plays a massive part in the Japanese economy, and its existence protects the Japanese government from bankruptcy.


   For these reasons, government debts must exist, and trying to pay off government debts is not that much-prioritized action that must be made soon.