BS Summary: This video contains 26 faulty reasoning types, including Overconfidence Bias, Availability Heuristic, and Begging the Question, with False Dilemma as the most egregious example at 34.4% saturation with 87 hits. Analysis detected 676 faulty-reasoning hits from 253 analyzed words, generating a BS Score of 70.6% and a BS Rank of 84% (4,233 of 25,564 videos). This video is worse (more manipulative) than 83.40% of the video peer group.
The headline figure you keep hearing is that Japan's public debt exceeds 250% of GDP, meaning 2 and 1/2 times the size of its entire economy.
No wonder people look at that and think, how the hell has this country not gone bankrupt already?
Here's another dumb question.
How do you actually pay back debt?
If you're earning $50,000 a year, but you have a loan of $125,000, no one necessarily expects you to pay off the entire $125,000 right away.
What matters most is whether you can keep making the required payments, the interest of plus whatever portion of the principal you're supposed to repay over time.
Together, these required payments are called debt service.
So, what about Japan?
Was Japan able to meet its debt servicing obligations?
Yes.
For the interest component, it paid next to nothing because for about 25 years, the Bank of Japan kept interest rates at basically zero.
As for the principal, whenever a bond hits its maturity date, they just rolled it over.
They issued a new bond to pay off the old one.
Kind of like getting a new credit card to pay off your old one.
This is a big reason why debt servicing ate up around a quarter of Japan's annual budget.
And as long as rates stay near zero, Japan could keep servicing its debt this way for a very long time.
This is why just shouting the total debt number is kind of pointless.
Analysis
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