1. Did the Japanese government have the ability to borrow near unlimited amounts and run deficits in an attempt to pump up the Japanese economy in the ’90s?
2. Will our federal government, in the face of a lousy economy, falling tax receipts, already huge deficits, and falling confidence by foreigners to fund further deficits, have that same borrowing ability? If yes, at what interest rate?
3. Were the Japanese net savers at the start of their lost decade?
4. Were Americans net savers at the start of our upcoming lost decade?
For me, these identify what I believe are the key differences between Japan in ’89 and the U.S. in ’07. We have no safety net, either in current savings or ability to borrow at reasonable rates, I believe.
