NEW YORK — In October 2016, Japan tried a new riff on an old economic strategy to mask the severity of mushrooming government debt: prodding the central bank to write Tokyo a blank check.
It was the first time since World War II that the Bank of Japan’s bond purchases would be “directly linked to the government’s issuance of debt,” observed analyst Mark Fleming-Williams at Stratfor. In many ways, he added, “this could be the biggest economic development Japan has seen since the 1985 Plaza Accord.”
Nearly nine years on, it’s an even bigger development. US President Donald Trump wants the Federal Reserve to issue a blank check to a White House that’s rapidly making runaway debt issuance great again.
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