Virtually no country in the Western world can balance its books. Germany might be an exception, maybe Switzerland. All have been resorting to forms of deficit financing to keep their sputtering economies going
''Keep their sputtering economies going''? Sounds more like the description of a heroin addict who shoot himself up with another dose. Problem is, the debt kept raising and we're near the overdose level.
This doesn't look like economic soudness to me.
This idea of economic fundamentals being sound if and only if there no budgetary deficits is an anachronism.
I never said that the economic fundamentals were solely based on budgetary deficits.
You have to look at a bunch of other factors ( % of the economy in the productive sector - industrial-, average salary of the population vs the debt accumulated by the country, trade surplus/deficit, size of budgetary surplus/deficit, how high are the interest rates, the savings rate of the population, etc.)
Everyone can't be running a trade surplus: this should be obvious to you. Germany's trade surplus means someone else's trade deficit.
Yes but these countries have huge trade deficits, wich shows how unproductive they are.
It is as if, I work as a cashier (salary 20k/year), and thanks to my credit cards, I can live in a 500k house, drive a 200k car etc.
And what you're saying is: hey, it's ok to run those huge personal trade deficits because not everyone can be a lender.
If it was small trade deficits, you'd be right, but we're talking about herendous ones.
Why not? If Japan can, why not them? And what is the alternative?
Well, first of all, Japan has a highest foreign exchange reserve than all of EU countries combined.
Also, Japan population have a higher saving rate than the EU population.
In other words, Japan can afford 'dumb' economic policies.:D