Debt deflation is exactly what I've been talking about for some years now. It is the logical outcome of massive automation in the economy. From factory automation, to CAD/CAM software which means engineering work can be done by far fewer workers.  Japan printing hundreds of billions and hiring millions to build bridges to nowhere is just a way of trying to deal with this reality. Imo those workers would be unemployed if it wasn't for that stimulus spending.  The reason Japan has been in this situation longer is their society is more advanced technologically and ahead of us demographically. As I predicted for a few years now eventually we would enter the deflationary death spiral as our society entered the same phase as Japan has been in for 20 years.  One difference is while Japan had the rest of the developed world to export to during the last 20 years, who was still growing with bubblenomics.. now we enter the phase, but without those export markets. And without the world beating industrial corporations. You may very compelling points and I think what you've been saying is basically correct. One problem that Japan faces now is that their export markets are slowly drying up as they now face competition from Korea (cars, flat screen TV's, now major appliances too) and more worrisome for them, China.    They had pinned their hopes on cooling off relations with the US in hopes of wooing China to be a major trading partner. Much to their chagrin, they've found out the Chinese really only wanted the initial investments from the Japanese corporations as well as capital equipment and technology transfers. The Chinese are now making their own brand-name goods and are slowly starting to spank the Japanese at their own game.    I think that relations with the US are starting to take a turn for the worse and that they will have to rely less on US export markets as there will certainly be retaliation for Japan pressuring the US to move its bases out of Japan. The Japanese are truly going to be stuck between a rock and a hard place with regards to China and the US.