Isn't there a significant issue with the Japanese economy due in part to an extremely high savings (not investing, saving) rate of the people which is hindering economic growth and caused a decade of stagnation?
Especially with Japan, you need to separate the ideas of "work" and "financial independence" because they are not necessarily related.
Okay, this is going to be a bit of economic 1x1, it is about something that is nearly always forgotten, especially by neoliberals. So please sit sown, take a deep breath and read this and think about it:
For every dollar saved someone has one dollar dept. Thats it. Sounds logical, right? If I give you a dollar, you are indepted to me by excatly one dollar.
If you save one dollar at the bank, you are a creditor of that bank, they are in dept to you by one dollar and you get e.g. 1% interest as a payment for that dollar.
If you take a dollar from that bank, the bank saved one dollar into you and charging you 10% for that privilege ;)
So if the japanese save so much money, who has it? Who has this dept?
Compared to other countries Japan has a very high rate of state dept. Mostly (also in difference to other countries) to its own people. Most of the japanese peoples savings are in the japanese state.
What did the government do with that money?
It invested it - into roads, schools and so on. GROWTH!!
The savings rate of a country have no influence at all on the economic growth, with the possible exception that a high savings rate makes the flow of money better so that it gets invested where the result is better.
That is true as long as the savings stay in the country, of course. And also as long as it is invested into the real economy. Not into derivatives of derivatives created by banks to sell at other banks.
Banks create money with the savings/dept mechanic. That is the reason why banks cropped up a few hundred years ago when even the richest person could not finance expeditions to india or the americas alone. Banks were a very important part in the industrialisation. But banks often no longer invest into real things, they "invest" into papers issued by other banks. That is arguably the reason for economic growth problems right now, too much money sloshing around without "working". (just one easy to understand example: Land prices have multiplied, but nothing was invested into machines or whatever to grow more, and even then, can you grow 3 times more wheat then before on already heavy industrialised land? No.)
And bloody stupid ideas by people like our german finance minister. Cut spending by workers, cut spending by retirees, cut spending by the state and miraculously companies will have more customers. Worked very well in Greece!
