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When even Paul Krugman is worried about the national debt, you know you have a problem. The country in question isn’t Greece or the United States, but Japan.

With low unemployment and high labor force participation, Japan has essentially no idle resources. The scope for boosting the economy with fiscal stimulus or easy money is almost nil. But Japan continues to run an enormous budget deficit every year. In 2014, the government had a deficit of 7.7 percent of gross domestic product, with a primary deficit — which excludes interest payments — of just under 6 percent.

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