Even though Japan’s “true” level of government debt is not as high as the commonly-watched gross measure suggests, it is still far higher than elsewhere. The ease with which Japan nonetheless copes with this might suggest that we should not worry too much about the rise in public sector debt levels seen in other countries in recent years. But the combination of conditions which have allowed it to carry its high level of debt is unique to Japan. And even in Japan’s case, these conditions won’t persist indefinitely.
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