What’s Next for Abenomics?

Martin Schulz - Newswire

Leading Japan economist Takatoshi Ito once described Japan’s underlying problem: “When an economy is growing, governments can afford to give a generous pension to the first generation. As long as it continues to do so, the pension can be rolled over into ever bigger amounts in a perpetual Ponzi scheme. But when growth rates decline and population growth turns negative (as is the case in Japan), the infinite Ponzi scheme ceases to work. Then the government must (among taking other actions) claw back the pensions of those already retired,” he said.

That claw back is well underway. As Japan approaches the boundaries of what monetary policy can achieve, Beacon Reports spoke to Martin Schulz of the Fujitsu Research Institute to learn how Japan’s government pays for public pensions through debt monetization at the cost to current savers. Click to read our article in The Diplomat.

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