U.S./Japan Trade Deficit

A creditor nation is one whose investments abroad exceed the size of foreign investments in its own economy. A debtor nation is one that owes foreigners more than the sum of its own assets abroad. Creditor nations have a great deal of leverage over those to whom they lend their money; debtor nations often become subservient to the interests of their creditors.

Japan replaced the United States as the world's leading creditor in 1986. The scope of recent Japanese capital outflows has been likened to the period in the 1950s and 1960s when the United States bought up much of Western European industry, but Japanese acquisitions over the last few years have actually far outstripped the American expansion of those days. In fact, Japan's net external assets already surpass by 20 percent the American record established over a thirty-seven year period (Williams 56-61).

Every single working day, Japanese individuals and corporations generate over a billion dollars' worth of savings. This excess cash rushes into domestic bank accounts, stocks, insurance premiums, and real estate speculation, but even these institutions cannot hold it all. Like water seek

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Japan become so successful in the financial world and in the production of goods and services and second, how have they managed to remain that way? At the end of World War II, three obvious reconstruction alternatives presented themselves to the Japanese. Japan could rebuild by inviting in foreign (American) direct investment; it could borrow heavily from abroad; or it could nationalize what remained of its industrial structure and pursue a centralized, state capitalist model. Most Western European countries relied on one or all of these mechanisms, along with the American-sponsored Marshall Plan, to rebuild their devastated economies. Japan chose none of the above. In part, foreign capital was not easy to come by. The Americans provided substantial reconstruction aid, but there was no Marshall Plan for Japan. As late as the end of the 1960s, American financiers were still skeptical about Japan's creditworthiness. Even if foreign capital had been more abundant, it is not clear Japan would have opted to rely on it. The Japanese did not want foreigners to gain undue influence over their economy, nor did they want to share the wealth on that distant day in the future when they knew they would be prosperous once again. Unt
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Some common words found in the essay are:
War II, Western European, Additionally Japan, United Japan, Hawaii Japanese, Plan Japan, America Western, Mexico Argentina, Ford Motors, Japan America, japanese investors, japanese companies, real estate, foreign capital, world war ii, industrial policy, country japan, marshall plan, richest country, creditor nation, net external assets, western european,
Approximate Word count = 1539
Approximate Pages = 6 (250 words per page)

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