Ramsey,
I also don't think the Japanese are ready to spend, not only because of uncertainty over the future, but also because an extended period of liberal spending has left many Japanese consumers relatively saturated with consumer goods. My suggestion was that they encourage consumers in other Asian countries to buy Japanese-made goods, by direct subsidy if necessary. The goods need not be frivolous. Surely there is a huge need for Japanese irrigation pumps, hand-tractors, rice mills, heavy equipment, etc. in Asian developing nations. The situation is in some ways analogous, as Zeev remarked, to the end of WWII: huge industrial capacity in some nations, a huge need for goods in others, which unfortunately lacked the capacity to pay. The Marshall plan opened up the flow of goods by providing easy money to pay for them. Where did the money come from? When deflation strikes, the printing press does have a real, albeit highly limited, role. |
