Will Fukushima Bankrupt Japan?

Nuclear Accident May Bankrupt Japan

I noted in April that a nuclear catastrophe could cost ten trillion dollars or more (many times more than the insurance which nuclear power operators are required to carry) … and could even bankrupt a country.

Taipei Times notes today that, according to a Japanese author:

A professor from the University of Tokyo has even estimated that it would cost up to ¥800 trillion [U.S. $10 trillion dollars], amounting to approximately 10 years of the national budget, if the soil and road surface of radiation-affected areas are to be cleaned up.

The damage is so much that the Japanese government would go well beyond bankruptcy, Liu said.

Of course, the Japanese government’s entire strategy from day one has been to cover up the severity of the Fukushima accident.

Given that Japan either won’t or is unwilling to pay for a real clean up of the Fukushima radiation, it appears that the people of Japan will pay for the accident with their health for generations to come.

Indeed, Fukushima, the financial crisis and other major disasters like the BP Gulf oil spill were all caused by the 1%: (1) making insane bets that nothing would blow up, and (2) cutting every possible safety measure to make more money.

And exactly like the toxic financial assets that the big banks dumped onto the national balance sheets of Greece, Italy, America and elsewhere – and ultimately the people – the Japanese government and Tepco are dumping the cost of the Fukushima disaster on the backs of the Japanese people in decreased health, vigor and prosperity.

See this   if you think we’re overplaying the severity of Fukushima.

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  • http://Japan Ben Wolf

    Japan is an autonomous currency issuer and cannot go bankrupt. Spending an aditional ten trillion would actually have the effect of stimulating demand and assisting the country in deleveraging the private sector debts which have hobbled its economy.

  • http://forwhatwearetheywillbe.blogspot.com/ Maju

    Japan can indeed go bankrupt if it issues bonds in dollars or other foreign currencies, which is a common practice, specially where local currency’s value is discredited. However it will still be able to have a likely inflating currency for the interior market. This may work for Zimbabwe but hardly for such an globally integrated economic power as Japan.

    In any case, it can and will undoubtly go into a deep economic crisis in any case, because I am not going to be the fool who buys Japanese goods unless I have a 120% safety certificate I can trust. This does not exist at all now (no ramen this winter for me but also maybe no Toyota cars for many people just in case, etc.) They are doing all in their power to hide the severity of the nuclear crists but this actually creates distrust among all (Japanese and foreigners).

    It would have been much better for Japan to have strict radiation controls and a full transparency policy (and mass evacuations) since day 1 because that would have shown the world that even in the worst of circumstances Japan was as serious, responsible and trustworthy as its fame suggested. Instead they project an image of radioactive Yakuza banana empire: an image we cannot trust for the sake of our health.

    Denial is not an option unless you’re ready to lose public confidence. The oligarchy has not learned that yet, neither in the USA nor in Japan nor in Europe. Because today “Internet gossip” (counter-info, free debate) is growingly more powerful than the traditional vertical media such as TV. This they have not yet learned (they are most of them in their 50s and older: they are obsolete in most cases, even if this actually depends on personal attitude and experience it also depends on age).

    Japan is at least as much a global economic problem as Europe or the USA. And it has no easy fix because it implies to radically change the authority concept and approach: from “nothing to see here, move on” to one of sincerity and trust. In the end it is the same problem as elsewhere but accented by the unprecedented severity of the nuclear catastrophe and the cultural peculiarities of Japanese society, where politeness dominates over critical thought.

  • http://Japan Ben Wolf

    There is absolutely no reason for Japan to issue bonds in anything but its own currency, which continues to appreciate despite two decades of deficit spending. When Japan, as an autonomous currency issuer, sells government bonds the buyer’s bank disburses reserves to the government’s account at the central bank. When the bonds mature the reserves are switched back. That’s all that happens because the government’s bonds aren’t actually debt, they’re an instrument by which the government drains excess reserves in order to hit a target interest rate. It’s strictly a monetary operation, not a fiscal one.

 

 

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