Republicans must win the Congress and the White House because America have to avoid the type of deflation and stagnation which has taken over Japan for a generation. Japan is one of my favorite places and I seriously thought of moving to Tokyo at one point. The Japanese stock market has collapsed 75% from 1989, and now the debt is 200% of GDP. The lesson is that deficit spending and stimulus programs do not work.
As the article notes:
“economists are now warning of ‘Japanification’ — of falling into the same deflationary trap of collapsed demand that occurs when consumers refuse to consume, corporations hold back on investments and banks sit on cash. It becomes a vicious, self-reinforcing cycle: as prices fall further and jobs disappear, consumers tighten their purse strings even more and companies cut back on spending and delay expansion plans.”
THE GREAT DEFLATION: Japan Goes From Dynamic to Disheartened