Biggest Stimulus Yet

Japan has announced a stimulus bill that amounts to a whopping 10% of their current GDP.  To put this in context, the President's stimulus was a between 5-6% of the US GDP back in 2009 depending on which numbers you use, which many Keynesian's argue wasn't large enough to adequately stimulate the private sector.

Any takers on how successful Japans latest round of stimulus will be? Considering that Japan has a history of pumping debt into their economy resulting in nothing more but burgeoning their liabilities section of their balance sheet; I will bet against the addition of any more debt helping. But this does signal something important.

What is signals is that Japan isn't going to even attempt to pay back their debts since they have already passed the event horizon it's time to abandon all pretext of fiscal responsibility. Japanese politicans', and perhaps much of the Japanese population by virtue that they elected their leaders, have signaled that they don't give two craps about weighing down their unborn children with debt that can never ever be repaid.  Japan has a debt to GDP level in excess of 200%, or a debt level almost as large as our own considering they have a $ 5 trillion dollar economy. Considering that Japan has struggled even to maintain growth rates above 2% I'm not optimistic about their ability to grow outside their debt levels, or even attract foreign debt buyers once their domestic sources have dried up.

Add in the fact that Japan's population has peaked and they will soon enter demographic decline, baring major technological advancements, it's game over for Japan.