Standard & Poor’s Ratings Services today revised to negative from stable its outlook on the ‘AA’ long-term rating on Japan. . . . .
The outlook change reflects our view that the Japanese government’s diminishing economic policy flexibility may lead to a downgrade unless measures can be taken to stem fiscal and deflationary pressures.
At a forecasted 100% of GDP at fiscal year-end March 31, 2010, Japan’s net general government debt burden is among the highest for rated sovereigns.
. . . .
Japan enjoyed a highly productive, export-oriented economy for decades. Then an economic downturn in the mid-1990s, followed by the Asian Financial Crisis in 1997, shattered the bubble. The government responded by using massive stimulus spending and financial-system bailouts to maintain economic growth. Rather than jolting the economy into health, this lead to accumulating public budget deficits that were ultimately covered by government bonds, which resulted in surging government debt.
Sounds a lot like what we’re doing here.
I received this in an email from a friend, then found another occurrence of the storyhere.