[quote=kewp][quote=jpinpb]
My question: How is our economy different/better?
How will reducing the rate to 0% help us? Or are we just destined and doomed to follow in Japan’s footsteps? Can we not learn from others’ mistakes?
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We are a nation of deadbeats, which in this case is an advantage.
Foreclosure/bankruptcy doesn’t happen much over there (they prefer ritualistic suicide). I wish I still had the link but I read a story about two years ago that profiled a few Japanese folks that were still paying insane mortgages on tiny apartments years after the bubble burst. These were top wage earners that lived like paupers to service their bubble mortgages.
The idea of default is alien to these people. If you can service your debt, you do. Whether its in your best interests or not.
America has no such qualms. We are a nation of deadbeats. We will declare bankruptcy/foreclose if its in our best interest. Regardless of whether we can afford to service or debt or not.
Heck, we will even max out our credit first!
I personally think this is all a good thing as it allows the market to find its bottom quicker while improving our collective ability to rate risk, vs. a more stagnant economy.
Beyond that, Japan is also a xenophobic culture which restricts the amount of capital inflows into their country.
I’ve said a few times that the easiest way to reboot our economy and housing market is to simply grant a work permit + green card to anyone that buys US real estate with 20% down from a domestic S&L. We have the culture and empty houses to pull this off, something Japan did not.
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Also.. the japanese govt. tried to keep it behind closed doors where ours is an open book.
I wish I put it on the site, but there was a recent article on msn that the average american’s debt level DECREASED
