Abenomics

Japanese Prime Minister Abe

The political battles in this country about government spending are going on in other countries as well.  Japan, which has been stagnant since its own real estate bubble burst in 1991 (!), has decided to bet its economic health on more inflation. 

The new policy of "Abenomics," named for Prime Minster Shinzo Abe, involves

...pushing fiscal and aggressive monetary stimulus while jacking up a debt load that is more than twice the size of its GDP.

In other words, borrowing lots of money for the government to spend, and printing even more.

In contrast, Germany is preventing other European countries from promoting inflation in Europe, based in part on their fear of the hyperinflation that occurred in Germany in the 1920s and contributed to the rise of Adolf Hitler.

German bills became so worthless they were swept up as trash.

As of right now, Abenomics seems to be working:

The 0.9 percent quarter-on-quarter growth — or 3.5 percent if the data were stretched over a year — confirmed Japan’s exit from recession after a decade of lost growth and deflation.

Whether that continues, and whether it leads Japan into yet another cycle of bubble and collapse, remains to be seen.  If it does work for Japan, expect other countries to follow suit.