That's the question that NYT readers should be asking themselves. In a front page article the NYT told readers that much of Japan's efforts at stimulus following the collapse of its stock and real estate bubble was ineffective. (To give some sense of scale, Japan's main stock index is currently at about 20 percent of its 1989 peak.) The article reports that critics of its efforts at stimulus claim that "that spending did little more than sink Japan deeply into debt, leaving an enormous tax burden for future generations." Well, this is a claim that can be very easily verified. How large is the tax burden being imposed on future generations? While Japan does have a debt that is much larger than its GDP, because the interest rate on its debt is extremely low (largely due to the fact that its central bank prints lots of money) the interest burden of the debt is actually quite limited. In fact, measured as a share of GDP, Japan faces a somewhat smaller interest burden than the United States. Given the importance of this point to the article, the reporter should have taken the time to determine the actual interest burden that Japan faces.
--Dean Baker
