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Fueled by low-interest mortgages, real-estate prices in Japan had risen so high that by the end of the 1980s just the land under the Imperial Palace in Tokyo was nominally worth more than all the real estate in California. Then, in late 1989, the bubble burst and real-estate prices plummeted, leaving Japans financial institutions saddled with toxic mortgages and facing bankruptcy.
Despite the common misconception that the Japanese government neglected the crisis, it intervened from the outset. In 1990, the Japanese Central Bank cut interest rates until they reached absolute zero. So money was free for banks to borrow. Nevertheless the Japanese stock market continued its fall, with the Nikkei index going from a high of 40,000 in 1989 to a low of 12,000 in 2001. So did real estate, which lost 80 percent of its value during this period.
The government next tried the classic Keynesian tactics, spending and tax cuts. Between 1991 and 1998, it pumped 100 trillion yen into the economy through public-works programs and, to further stimulate spending, cut taxes by 2 trillion yen. All that these measures succeeded in accomplishing was raising Japans public debt to 100 percent of its GDP.
WOW!!!! Three threads in four minutes!
WOW!!!! Three threads in four minutes!
It's cut and paste all over again.
How interesting.... when I said the same thing, months ago, the left told me I was an idiot. I am not at all surprised that the unpleasant truth is now dawning on idiots.
