Posted by: Greg Lance-Watkins – Greg_L-W.
The Iminent Defeat of Japan is More Absolute Today than it was on 14-Sep-1945
Japan’s demographics spell doom
International investor and entrepreneur Simon Black of Sovereign Man writes, Sept. 15, 2014:
One in eight Japanese is aged 75 or older. People over 65 will reach 33 million, the largest ever, roughly 25.9% of the population.
The thing about demographic trends is that they’re like a huge oil tanker—once they’re on their course it’s very hard to steer them around in another direction.
These are monumental, generational changes that are very hard and slow to reverse.
By today’s trend, Japan’s population will dwindle from 127 million today to around 100 million by 2050. It’s the worst possible demographic nightmare.
People stopped having as many babies decades ago. It was too damned expensive.
Then the big collapse came in the late 80s, and the economy has been dragging it heels ever since.
When prosperity is low, people consequently delay having children. They have fewer children. Or they don’t have them at all.
This has enormous long-term implications for the country and its fundamentals. Fewer people of working age means fewer jobs, less productivity, less consumption and less government tax revenue.
On the other hand, a bulging group of older people means more spending for medical care and pensions.
In the recently proposed budget for fiscal year 2015, the Japanese government earmarked 31.7 trillion yen for social security, welfare and health spending.
This is the largest item in the budget, consuming 31.2% of all planned government spending.
And it’s only getting larger.
It doesn’t help that Japan is essentially already bankrupt.
The second largest item in Japanese government’s budget is interest.
While social security, welfare and health spending has increased by 3% from the current budget, debt servicing is up by 11% and now amounts to 25.8 trillion yen, or an incredible 25% of Japan’s budget.
So just between pensions and interest, they’re spending 57.5 trillion yen. Last year they only collected 50 trillion in tax revenue.
So before they spend a single yen on anything else in government… anything at all… they’re already 7 trillion yen (about $70 billion) in the hole. They have to borrow the rest.
Bear in mind, this is coming at a time when interest rates for 10-year Japanese bonds are 0.5%, and even closer to zero on shorter notes.
If interest rates rise to just 1%, which is historically still very low, Japan will spend almost all of its tax revenue just to service the debt!
You can’t make this stuff up. It’s a screaming indicator that this system can’t possibly last.
Europe, the US and Japan, three of the biggest economies in the world, are all on a similar inevitable trend—they’re in debt up to their eyeballs, with absolutely no arithmetic possibility of ever getting out of the hole unscathed.
Japan is just worst of them all.
And history is so full of examples of what governments do when countries get into this position: as reality beckons, they become even more careless and destructive.
Meanwhile, researchers found that young Japanese not just shun the idea of marriage and having children, they increasingly are asexual. More than 25% of unmarried men and women in their late 30s have never had sex.
Add to all this the following doleful statistics from Wikipedia:
Suicide is the leading cause of death for Japanese under 30. In 2009, the number of suicides exceeded 30,000 for the twelfth straight year.
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Posted by: Greg Lance-Watkins
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