Why Japan has so much debt?
Essentially, the Japanese government's strategy is to borrow at an extremely cheap rate and invest in risky, high-return assets—a factor that partially explains why Japan can sustain a high level of debt despite running a consistent deficit.
But how did Japan find itself in this situation? Japan's descent into its debt trap began in the 1990s with the burst of a real estate bubble. This problem was further compounded by high demand for stimulus packages and an ageing population, which has caused Japan's debt to continually pile up until at least 2021.
But Japan's debt is different. It's mostly owed to the Japanese people in the form of government bonds. The Japanese government owes each of its citizens about 7.5 million yen. Since 95% of its debt is held domestically, its economy is not as precarious as it would be if it were debt to foreign countries.
At the top is Japan, whose national debt has remained above 100% of its GDP for two decades, reaching 255% in 2023.
Though China owns a large amount of U.S. debt, it isn't the United States's largest creditor. The greatest amount of U.S. debt is owned by the U.S. government, while the largest foreign creditor is Japan. China owns around 2.6% of U.S. debt, which it buys because the Chinese yuan is pegged to the dollar.
National debt of Japan 2018-2028
The amount of Japan's national debt in 2021 amounted to about 9.51 trillion U.S. dollar. In a ranking of debt to GDP per country, Japan is thus currently ranked first.
The highest debt countries have more obligations than those debt free countries. The countries with the highest debt countries are Venezuela, Japan, Greece, Italy, the USA, France, and the UK.
1) Switzerland. It is no surprise to see Switzerland on this list. Switzerland is a country that, in practically all economic and social metrics, is an example to follow. With a population of almost 9 million people, Switzerland has no natural resources of its own, no access to the sea, and virtually no public debt.
Foreign holdings
Including both private and public debt holders, the top three December 2020 national holders of American public debt are Japan ($1.2 trillion or 17.7%), China ($1.1 trillion or 15.2%), and the United Kingdom ($0.4 trillion or 6.2%).
As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).
Which is the richest country in the world?
| Rank | Country | GDP per Capita 2022 |
|---|---|---|
| 1 | 🇱🇺 Luxembourg | $126,426 |
| 2 | 🇧🇲 Bermuda | $118,846 |
| 3 | 🇳🇴 Norway | $106,149 |
| 4 | 🇨🇭 Switzerland | $92,101 |
Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation).
The public owes 74 percent of the current federal debt. Intragovernmental debt accounts for 26 percent or $5.9 trillion. The public includes foreign investors and foreign governments. These two groups account for 30 percent of the debt.
Since the U.S. dollar has a variable exchange rate, however, any sale by any nation holding huge U.S. debt or dollar reserves will trigger the adjustment of the trade balance at the international level. The offloaded U.S. reserves by China will either end up with another nation or will return back to the U.S.
Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion.
Many people believe that much of the U.S. national debt is owed to foreign countries like China and Japan, but the truth is that most of it is owed to Social Security and pension funds right here in the U.S. This means that U.S. citizens own most of the national debt.
The government reported the economy shrank at an annual rate of 0.4% in October to December, according to Cabinet Office data on real GDP released Thursday, though it grew 1.9% for all of 2023. It contracted 2.9% in July-September.
Given the stigma, embarrassment and shame that can be associated with debt [55] and that it may be linked to a reluctance to seek help in Japanese individuals with mental health problems [26], the results of this study suggest that efforts to increase awareness of debt, its effects, and effective responses both among ...
As of October 2023, Japan held United States treasury securities totaling about 1.1 trillion U.S. dollars.
Firstly, there is a portion of this debt that is held by the Bank of Japan, which basically levels out. The government of Japan also holds massive amounts of loans, bonds and equities that offset the cost of debt.
Why is the US in so much debt?
Years of elevated budget deficits, exacerbated by massive federal spending during the COVID-19 pandemic, have taken the debt to historic levels: totaling more than $26 trillion in 2023, U.S. federal government debt is now at its highest percentage of gross domestic product (GDP) since World War II.
As of the end of 2022, debt per adult in Japan amounted to approximately 27.3 thousand U.S. dollars. This represented a decrease from 30.8 thousand dollars per capita in the previous year.
Ecuador, Argentina, Paraguay are all countries that have refused to repay debts to the World Bank, the IMF, the Paris Club and bankers. Eric Toussaint mentioned these examples yesterday at the UCAD press conference at the World Social Forum .
Debt as a share of GDP has risen to about the same level as in the United States, while in dollar terms China's total debt ($47.5 trillion) is still markedly below that of the United States (close to $70 trillion). As for non-financial corporate debt, China's 28 percent share is the largest in the world.
Having no more debt means, that the government does not have to pay interest anymore. This can mean, that there is more money free to spend on other things like infrastructure or welfare.
