And West Virginia is becoming increasingly reliant on Japanese companies as the Japanese economy sinks into the Pacific Ocean. Economy sinking Pick up about any national news magazine in any given week and chances are there s an article or opinion piece about how the Japanese economy has had a bad decade and is headed for several more lean years. The booming Japanese economy of the 1980s, which coincided with an American recession featuring high unemployment and bank failures, was built on land speculation and high-risk bank loans. The total Japanese government debt is about 130 percent of the nation s gross domestic product. That means the government could take every dollar s worth of goods and services produced by the Japanese people in any given year and still be in debt.
Banks can t cut interest rates much lower.
The prime rate is already less than 1 percent. On top of that, if Japanese banks ever had to admit many of the loans they hold are worthless, they would go bankrupt themselves. Land prices have collapsed. Homeowners find the homes they bought in the 1980s are worth only half what they paid for them. And consumers aren t consuming.