＜Comparison between growth rate of (nominal) GDP and interest rate on loans＞
| Year |
GDP
(¥1 billion） |
Growth rate
(%) |
Loan balance
of banks
(¥1 billion） |
Interest rate
on loans
(%) |
Difference
(%) |
Amount
of loss
(¥1 billion) |
| 1984 |
305,144 |
6.85 |
210,479 |
6.54 |
-0.30 |
-639 |
| 1985 |
324,290 |
6.27 |
237,170 |
6.27 |
-0.01 |
-20 |
| 1986 |
339,363 |
4.65 |
300,165 |
5.29 |
0.64 |
1,914 |
| 1987 |
355,522 |
4.76 |
337,784 |
4.92 |
0.16 |
536 |
| 1988 |
379,657 |
6.79 |
372,175 |
4.96 |
-1.83 |
-6,798 |
| 1989 |
406,477 |
7.06 |
412,407 |
6.43 |
-0.63 |
-2,612 |
| 1990 |
451,473 |
11.07 |
443,304 |
7.68 |
-3.39 |
-15,009 |
| 1991 |
474,993 |
5.21 |
462,644 |
6.50 |
1.29 |
5,979 |
| 1992 |
483,607 |
1.81 |
473,913 |
5.20 |
3.39 |
16,054 |
| 1993 |
489,891 |
0.89 |
479,977 |
4.18 |
3.29 |
15,807 |
| 1994 |
491,640 |
0.77 |
480,267 |
4.00 |
3.23 |
15,506 |
| 1995 |
504,038 |
2.52 |
486,356 |
2.71 |
0.19 |
911 |
| 1996 |
516,729 |
2.52 |
488,290 |
2.50 |
-0.02 |
-92 |
| 1997 |
521,153 |
0.86 |
493,023 |
2.37 |
1.52 |
7,483 |
| 1998 |
514,418 |
-1.29 |
488,820 |
2.22 |
3.52 |
17,184 |
| 1999 |
510,687 |
-0.73 |
468,810 |
2.05 |
2.78 |
13,020 |
| 2000 |
515,478 |
0.94 |
463,916 |
2.05 |
1.11 |
5,145 |
| 2001 |
502,602 |
-2.50 |
448,223 |
1.88 |
4.37 |
19,609 |
| Amount of loss（1984〜1990） |
-22,628 |
| Amount of loss（1991〜2001） |
116,604 |
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Difference between interest rate on loans and nominal economic growth
rate is written in tabular form. In addition, how much debtor’s loss has
occurred is calculated by multiplying loan balance by the difference.
What is surprising, loss of 110 trillion yen has been occurred for 11
years from 1991 to 2001. Loss of 10 trillion yen, about 2% of GDP has occurred
per year averagely.
Essence of present bad debt problem may be understood in this table.
Interest rate on loans over economic growth rate is essential factor of
new occurrence of bad debt. Interest can’t be paid because economic value
doesn’t increase over economic growth rate. It is not applied to a specific
company with excess liabilities. Interest can’t be paid by average company
in Japan.
Another asset must be sold in order to repay excess interest. Companies in Japan have been doing it since 1991. Asset has been lost by selling it for over 10 years. Therefore it is impossible to repay, and companies fail.
[Interest rate must be plus]. This way of thinking has no theoretical
root. As a result of interest rate management on condition of this premise,
huge loss has occurred in companies in Japan. And responsibility of the
loss is shifted to major banks, financial center.
If the status that interest rate on loans is over economic growth rate is continued as what it is today, bad debt occurrence continues. Bad debt depresses business by deflation occurrence rule. Present plus interest rate policy makes economy of Japan destroyed.
Nominal economic growth rate in the January-March quarter in 2003 was
minus. In government economic prediction, nominal economic growth rate
is ?0.2% in 2003.
If economic growth rate is minus and interest rate on loans is plus,
bad debt occurs inevitably. But government can’t understand it. If interest
rate on loans of banks is 1.8%, bad debt of 8〜9 trillion yen will occur
for a year. (All bad debts will not always surface. Loss will occur potentially.)
In short, government permits the occurrence of bad debt. Nevertheless,
in case of actual occurrence of bad debt, government shifts the responsibility
to management of banks. Don’t you think it terrible? The mistake of lender
policy is shifted to private company.
After understanding what is written above, government should begin to
create laws in order to introduce minus interest rate as soon as possible.
Otherwise Japanese economy can’t be recovered eternally.
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