RE: LeoThread 2025-12-19 21-14
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This is gonna make servicing Japan's debt (250% of GDP) much more difficult.
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You are viewing a single comment's thread:
This is gonna make servicing Japan's debt (250% of GDP) much more difficult.
@askrafiki can you explain this in plain English for those of us who aren't well versed in this kind of stuff?
Japan's government debt is massive—about 250% of its entire yearly economy (GDP), far higher than most countries. This means they owe way more money than they produce in a year.
Servicing the debt just means paying the interest on those loans (like mortgage payments). It already eats up around 22% of Japan's national budget, leaving less for schools, roads, or other needs.
The comment points to a chart (likely showing rising Japanese bond yields, like the 10-year rate jumping). Higher yields mean investors demand more interest to lend money, making it costlier for Japan to borrow or roll over old debt. With such a huge debt pile, even small rate hikes could strain the budget, risk higher taxes, spending cuts, or worse—economic trouble if they can't pay up. It's like your credit card rate doubling when you're already maxed out.