Japan's 20 year recession.......

[cardude]

BBC NEWS | Business | What caused Japan's recession?

Ran across this link to an article from 2002 about Japan's then 10 year recession. Lots of similarities to today IMO-- struggling after a bubble economy, banks burdened with bad assets, people stopped spending, and then the govenment started spending up to 130% of GDP on stuff that was not needed and lowered rates to 0%.

Sound kind of familiar?

Remember, that was in 2002, and they still haven't recovered.

My question is, how would trying to retire using the SWR idea work out in such a scenario? Has anyone back-tested the SWR idea in an economic environment like Japan has had the past 20 years?

 

[kumquat]

Doesn't Japan have retirees? I haven't read anything to suggest they eat dog food or commit mass suicide.

 

[thefed]

Doesn't Japan have retirees? I haven't read anything to suggest they eat dog food or commit mass suicide.

dog FOOD? I thought they just eat the dogs?


oh wait, that's china. sorry

 

[OAG]

It tastes like chicken!

 

[ziggy29]

Doesn't Japan have retirees? I haven't read anything to suggest they eat dog food or commit mass suicide.

They also have much more of an extended family household structure.

 

[Stevewc]

They also have much more of an extended family household structure.

What does this mean? Eat your brothers and sisters?

 

[bssc]

What does this mean? Eat your brothers and sisters?

Isn't that humanitarianism?

 

[FIREd]

It's not all rosy for retirees (and others) in Japan.

Bloomberg.com: Poverty, Pension Fears Drive Japan's Elderly Citizens to Crime
More poor, unemployed and elderly people in Japan - Asia News
The Face of Poverty Ages In Rapidly Graying Japan - washingtonpost.com
BBC NEWS: In pictures: Japan's homeless (that's dating back to 2004, but the situation has probably gotten even worse lately)

 

[Rambler]

Most of them LBYM and save like the dickens...and when times get rough like now, they just stop buying anything and save even more. Too bad the returns there are dismal. The equivalent of a 5 year CD would return something like 0.1%...but then there's deflation so real return may be a little better...

R

 

[kyounge1956]

Doesn't Japan have retirees? I haven't read anything to suggest they eat dog food or commit mass suicide.

No, but they do sometimes work themselves to death.

 

[dex]

http://news.bbc.co.uk/1/hi/business/2193853.stm
then the govenment started spending up to 130% of GDP on stuff that was not needed and lowered rates to 0%.

Sound kind of familiar?

Remember, that was in 2002, and they still haven't recovered.

I don't know of any government action that has pulled an economy out of a recession - except Hitler and Mussolini.

Government/the people can help those hurt by a downturn.

We were experiencing the Wealth Effect; we are now experiencing the Poor Effect. When people feel optimistic they will spend.

My question is, how would trying to retire using the SWR idea work out in such a scenario? Has anyone back-tested the SWR idea in an economic environment like Japan has had the past 20 years?

Good question - I don't have the answer.

 

[OAG]

The culture in Japan while changed over the years it still has a lot of the older folks living with younger family members thus eliminating the costs of home ownership for them. Most people (current generation included) still hold the older folks in high esteem which tends to make their life a lot more simple and enjoyable. Many seniors in Japan hold their country in high regard and do not want to leave their environment. IMO they are living like Americans did in the 50's where a "home" may have as many as 3 or 4 generations under one roof. Life centers around the family and as long as everyone is eating well all is well. We could learn a lot from them, but we Americans IMO think we "know the answer" which IMHO we do not necessarily. Of course a similar argument could be made for many European countries so it is not unique to the Orient.

 

[Free To Canoe]

I don't know of any government action that has pulled an economy out of a recession - except Hitler and Mussolini.

Hitler and the public works programs of the 1930s is another example of where stimulating the economy move one toward prosperity (if it is done right). That economist whose last name starts with a K mention it in the past.

I am more optimistic about our society's ability to do what it takes to get us out of recession. From what I read, Japanese special interests and the ingrained saving gene have derailed their govts efforts to get money into the economy. Hopefully, our country's special interests cannot do the same here.

Free

 

[unclemick]

Pssst - dividends. The Norwegian widow is now on auto deduct so she doesn't need to hang by the mailbox.

Multiple generations under one roof has not gone totally out of style - Mom passed in 2005(1993-2005).

heh heh heh -

 

[Gone4Good]

My question is, how would trying to retire using the SWR idea work out in such a scenario? Has anyone back-tested the SWR idea in an economic environment like Japan has had the past 20 years?

I tried to do this a while back, can't find the file now. I don't remember the specifics, but 4% didn't work. I think 3% was surviving but I'd guess with the latest plunge in stock prices, 3% would be running out of gas now too.

 

[dex]

Hitler and the public works programs of the 1930s is another example of where stimulating the economy move one toward prosperity (if it is done right). That economist whose last name starts with a K mention it in the past.

I agree if we define public works as:
1. increasing industrial output by gearing up for war
2. reducing unemployment by increasing the size of the army, navy, air force
3. taking away business and possessions from Jews and other undesirables
4. reducing the population by making conditions in the country inhospitable for undesirables

 

[bssc]

Well, speaking of government spending to help Germany, there was always The Marshall Plan

 

[Free To Canoe]

Well, speaking of government spending to help Germany, there was always The Marshall Plan

Good point BSSC.

Dex,

Getting money into the economy stimulates it.
Now it is just a question of HOW you do it.
Some ways push your hot buttons, others don't.

Free

 

[Koolau]

Cardude,

Don't have any idea how to answer your actual question, but keep in mind (as others have alluded to) Japan has a very different culture than most of the US. (Living in Hawaii, you see this effect as a significant minority of our state is at least "culturally" Japanese. Multiple generational households are quite common here - for a lot of reasons.)

Additionally, the US economy, political situation, central banking, trade barriers (official but more often unofficial in Japan) and many other factors are different in Japan.

Still, your question has a lot of merit and I hope one of the "techies" on the forum can help to answer it. If it turns out that Japan is a type for the US recovery to come, it will be an important question to answer!

 

[ERD50]

Good point BSSC.

Dex,

Getting money into the economy stimulates it.
Now it is just a question of HOW you do it.
Some ways push your hot buttons, others don't.

Free

If that spending does not lead to *sustainable* improvements/growth, it is just another house of cards that will collapse.

So, throw money, maybe see a spike and collapse later, or take a slow crawl back? I think those are probably the options. I'll take the slow crawl - hopefully, it is uphill.

-ERD50

 

[Texarkandy]

Free To Canoe][/b]
Hitler and the public works programs of the 1930s is another example of where stimulating the economy move one toward prosperity (if it is done right). That economist whose last name starts with a K mention it in the past.

I agree if we define public works as:
1. increasing industrial output by gearing up for war
2. reducing unemployment by increasing the size of the army, navy, air force
3. taking away business and possessions from Jews and other undesirables
4. reducing the population by making conditions in the country inhospitable for undesirables

OK - how about this variation:

1. increasing industrial output by gearing up for [-]war[/-] the war on terror

2. reducing unemployment by increasing the size of [-]the army, navy, air force[/-] Homeland Security, the Border Patrol, Transportation Security, etc etc

3. taking away business and possessions from [-]Jews and other undesirables[/-] investors (foreign & domestic)via nationalization of banks & industries to "save" them

4. reducing the population by making conditions in the country inhospitable for [-]undesirables[/-] illegal aliens & intending legal immigrants (& perhaps even some US Citizen retirees? )

 

[dex]

Good point BSSC.

Dex,

Getting money into the economy stimulates it.
Now it is just a question of HOW you do it.
Some ways push your hot buttons, others don't.

Free

The Marshall plan was the USA giving foreign aid to European counties.
Those countries were not burdened with the debt. The money did not come out of the economy of those countries. Also, those countries were in rubble the money and fact that the people were desperate for work, and literally hungry so the help was able to help get those get countries moving. It cost about 13B or 90B in today's dollars.
http://www.cato.org/pub_display.php?pub_id=6138

But the Marshall was not the only thing. Those countries were given food and Most Favored Nation Status; more helping hands.

Using the Marshall plan is not a valid input in the context of this discussion - so not a good point.

 

[dex]

OK - how about this variation:

1. increasing industrial output by gearing up for [-]war[/-] the war on terror

2. reducing unemployment by increasing the size of [-]the army, navy, air force[/-] Homeland Security, the Border Patrol, Transportation Security, etc etc

3. taking away business and possessions from [-]Jews and other undesirables[/-] investors (foreign & domestic)via nationalization of banks & industries to "save" them

4. reducing the population by making conditions in the country inhospitable for [-]undesirables[/-] illegal aliens & intending legal immigrants (& perhaps even some US Citizen retirees? )

Are you suggesting we do these things?

 

[Gone4Good]

Are you suggesting we do these things?

I think he's pointing out that we already have done these things.

 

[Texarkandy]

I think he's pointing out that we already have done these things.

Correct
(and not advocating particular portions to be good or painting any as bad, just making observations ya know)