Good News! The '1,000 Trillion Yen National Debt' is Actually '1,000 Trillion Yen in National Assets'!
"Japan's debt exceeds 1,000 trillion yen!" "Over 8 million yen per citizen!"
...Every time you see the news, don't you feel your anxiety being stirred up by words like these?
There are so many reports that make it seem as if our future is pitch black due to debt.
"This burden will be passed on to future generations..."
Many people likely feel a vague sense of anxiety.
But what if that "national debt" actually circles back to become"our assets"...?
You might think, "That's ridiculous!" But if you learn the "mechanism of money" that I am about to talk about, that common sense might come crashing down with a loud noise.
that common sense might come crashing down with a loud noise.
By the time you finish reading this article, you should have acquired "new glasses"
to see through the hidden side of economic news.
[Shocking Fact]
Do you know the true nature of "money"?
First, let's take a peek at the "hidden face" of banks.
Before we get into the main topic, let me take a small detour. Do you know how the "money" you use every day is created?
"Well, the Bank of Japan prints it, right?"
That is half right and half wrong.
Actually, most of the money circulating in the world is not the bills (cash) printed by the Bank of Japan.
Its true form is
bank "deposits".
And those deposits arecreated out of nothing the moment someone takes out a loan.
It might not click for you. For example, let's say you take out a 30 million yen loan from a bank to buy a house.
At that moment, the bank doesn't take cash sleeping in a vault and hand it to you. All the bank clerk does is hit the keyboard andtype (record) the number "30,000,000" into your passbook.
At this moment, new money (deposits) worth "30 million yen" was born into the world. Yes.Your personal "debt (liability)" became the source of someone else's "deposit (asset)" in the world.
This is the true nature of the mechanism called "credit creation" in economics textbooks.
In other words,[Money = Someone's Debt]is the simple rule of this world.
[Main Topic]
The government's "deficit" is everyone's "surplus"
The trick behind national debt
Now, let's look at the "national debt," which is our main topic, wearing these new glasses of "money = someone's debt."
What does it mean for the government to take on debt? The answer is issuing "government bonds."
So, who is buying those government bonds? Most of them are Japanese banks and insurance companies.
This is where it gets important.
The government decides, "We will do 1 trillion yen worth of public works!" and issues 1 trillion yen worth of government bonds.
A bank buys that government bond for 1 trillion yen.
The government then transfers that 1 trillion yen to the construction companies involved in public works projects,
or deposits it into the bank accounts of the people working there as wages.
Now, what do you think happened?
The government is left with "1 trillion yen in debt (liabilities)."
However, at the same time,
"a total of 1 trillion yen in deposits (assets)" has been newly created in the bank accounts of the private sector (companies and citizens).
Do you see? The more the government goes into debt (deficit), the more the assets (surplus) of someone in the private sector increase by that exact same amount.
In other words, the "1,000 trillion yen national debt," when viewed from the flip side of the coin, is "1,000 trillion yen in assets held by someone among the public." Government liabilities and private assets are always a set.
Of course, the content of the debt (whether it is wasteful spending or not) should be thoroughly debated. However, being afraid that "Japan will collapse!" just by looking at the "amount of debt" might be the great misunderstanding of the century, as it only looks at half of the picture.
【Applied Version】Graduate from "Debt = Evil."
Successful people buy the future with "debt."
Once you understand this mechanism of "national debt," you can also update your thinking regarding our personal "debt."
Could your "prudence" be your biggest opportunity cost?
"I absolutely do not want to go into debt." Thinking that way is wonderful. However, in the business world, debt is not "evil," but an "accelerator" for growth.
Successful managers and marketers are always conscious of "leverage."
For example, suppose there is a business that generates 50,000 yen in profit annually with 1 million yen of its own capital. It is prudent, but growth is slow, right? On the other hand, a successful manager uses 1 million yen of their own capital as a base, borrows 9 million yen from a bank, and operates the business with a total of 10 million yen. Even after paying interest, the profit remaining in hand is many times greater than when using only their own capital.
This is exactly the same for corporate marketing activities. Advertising expenses are not "costs (losses)." They are "upfront investments (debt for the future)" to bring in future sales.
Furthermore, marketing is also the act of conveying value to customers, saying, **"This expense is not a loss. It is 'smart debt' that will enrich your future."** "If you buy this PC, your work efficiency will increase." "If you attend this school, your career will open up." These all justify current expenses (debt) by promising future returns.
From tomorrow, the way you see the news will change.
How was it?
There is no longer any need to be afraid of news about "national debt." Once you know the mechanism by which money is born from "someone's debt" and understand the trick where government deficits become "private sector surpluses," the way you see the world will change completely.
Do not just view debt as a "risk," but perceive it as an "accelerator for creating the future." This perspective should be useful when thinking about national finance, as well as when thinking about your own business or career.
Today, you have acquired a 'new pair of glasses' to help you decipher the rules of society. From tomorrow on, whenever you see the words 'national debt balance' in the news, try whispering this to yourself in your heart:
'I see, that means our assets have increased by that much.'And so on.
That perspective is the most powerful weapon for living wisely and prosperously in this complex society, without being swayed by information.