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by klodolph 3297 days ago
> The government is doing this in an effort to prop up the economy and spur growth.

How so?

From where I sit, Japan's borrowing is funding infrastructure rebuilding and quantitative easing. The infrastructure, including energy production, is necessary for future economic and human activity. Quantitative easing combats deflation and keeps monetary policy functional when interest rates are low. This borrowing looks neither unsustainable nor does it look like a measure to artificially prop up the economy.

> If they were to stop borrowing money without a substantial leap in technological progress, would the economy go into a deep recession?

If you suddenly stop borrowing money, it would cause economic turmoil, just because everything is economically connected and everyone's economic forecasts would change. The borrowing is being used to support QE which causes inflation, without it Japan could be at risk of deflation. Deflation would mean that goods and services would get cheaper (and maintaining quality of life would also get cheaper), but there are also negative consequences—people who save money win, people who borrow money lose, people who invest money have a hard time making good investments, lack of investment causes problems down the road, etc.