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Since the Japanese save so much more money than Americans, then where is this money going?
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They don't save it they spend it. The cost of living there is higher than in the US, AND they spend it on social welfare programs like European countries do. These are the reasons why their economy, along with France and Germany's has ground to a halt.
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I agree with you that it is not going into the stock market, but then that is plainly obvious. Americans were not investing in stocks in the 1930's either. I contend that the depressed markets are the result of the contraction of credit and deflationary monetary conditions even in the face of negative real interest rates.
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Contraction of Credit? - NOT
Deflation - Maybe, I wonder how many people in Japan see the cost of goods going down? I doubt too many.
I really think the reasons are: 1. They grew overly fast creating a bubble 2. It burst when they out paced the world's demand for their particular markets, for the price they could provide them at. (As the Japanese got wealthy, they were unable to produce products as cheap as before) 3. They started taxing the rich, giving to the poor and encouraging people not to work.
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The average US citizen curently has a ZERO percent savings rate. The average US worker has like 50 grand in their 401K.
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Eh? [img]/images/graemlins/confused.gif[/img]
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The last time I checked, we were running a trade deficit of several hundred billion a year. As opposed to the Japanese who manufacture many consumer goods products and have continued to run a vast budget surplus even throughout their recession.
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Oh Good Point! This is definitely a reason for their slump. While Americans run a HUGE and PROFITABLE trade deficit, by buying lowpriced goods from around the world, and then investing all of that leftover cash into more profitable returns.
Checkout
Free Trade to see why running a trade deficit is AWESOME! It also shows how increasing trade deficits are a leading indicator of economic upswings.
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Of course, unlike the US, they actually have a strong manufacturing base and an highly educated workforce.
What do we produce as a country that will sustain our economy in the face of a real estate downturn? Here is a good article on the topic:
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Well if you checkout
Exports You will see all of the wonderful things that the US exports... While demonrats believe that JOBS are at the top of the list, it is totally untrue. We export High dollar items. Airplanes. Nuclear Reactor components. Cars. Etc.
Do we risk outstripping demand for those items and running into the same problems that Japan has? We sure do. ESPECIALLY if we keep letting our government stamp each tax dollar into a nickel before passing it on to the "disabled" and the welfare mom's whom we encourage not to work. We may only have 5% unemployment but only 2/5 of the population is employed, and only 2/5 of those are employed at the same place for more than 6mos out of the year. This is an incredible burden on our society and economy.