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Abenomics will fail if Japan doesn’t address its debt problem. Here’s the crucial way forward
Japan’s government debt is so excessive that, one way or another, many think it will eventually default. But there’s a way Japan can begin sloughing off its debt and growing its economy: by privatizing government assets. In fact, the nature of its debt means that it can’t fix its debt problem without doing that, says Michael Pettis, a finance professor at Peking University’s Guanghua School of Management. Pettis likens it to the US railroad boom in late the 1800s. “Most of it was very, very wasteful and the companies eventually went bankrupt. The railroads shifted to new owners who bought at a significant ... (full story)