BOTSWANA? :

Japan's new debt warning (Heather Stewart, June 1, 2002, The Guardian)

Japan's government debt was slashed to a lower grade than Botswana's yesterday, as its central bank stepped into the foreign exchange markets in a desperate bid to save its recession-hit economy. [...]

[Moody's] issued a statement saying that Japanese government debt, which hit 135% of GDP at the end of March, would soon "approach levels unprecedented in the postwar era in the developed world", adding that reformist prime minister Junichiro Koizumu's policies would not be sufficient to reverse the situation.

Recall, if you will, that just about fifteen years ago Japan was held up to us by liberals as the very model of how a developed nation's economy and society should be structured--with central planning; an emphasis on heavy industry and manufacturing; permanent job security; population growth slowed to zero; a thorough social welfare net; etc..

Meanwhile, America chose a different path--allowing what Joseph Schumpeter called capitalism's waves of "creative destruction" to wash through our economy, radically downsizing many industries and haphazardly letting the free market dictate a switch from a manufacturing economy to an information economy; resisting the extension and even contemplating the privatization of government services; adding to the population both by fairly steady birthrates and by massive immigration, etc.

And today America remains not only history's most successful economic and military power but the only developed nation in the world that is capable of balancing its budget. Are intellectuals ever right?

Posted by Orrin Judd at June 3, 2002 12:34 AM