If Japan Has an Onerous Debt, Why Are Its Interest Payments Less Than Ours?

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The ratio of debt to GDP in Japan is more than twice as high as in the United States. This was largely the result of its stimulus efforts in the 90s to lift the economy out of its downturn. In both its editorial and news pages the Washington Post likes to hold up Japan as a warning of what can happen if our government spends too much to try to promote recovery. For example, in article on Japan today it refers to the country's "onerous" debt. The only problem with this story is that interest is a smaller burden in Japan than in the United States. This is due to the fact that interest rates are considerably lower in Japan. (Its central bank bought much of the debt.) So, the claim that the debt is onerous is simply the Post's editorializing. It does not accurately represent the burden of Japan's debt on its population.

--Dean Baker

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