So  Japan’s  debt will be 300+% of GDP by 2020, but nothing to worry but because 9%% of the bonds are domestically owned….

The government will also have to borrow even more money, issuing bonds. Over the next five years, Japan will need to marshal some $250 billion for reconstruction. The country is not on the verge of a debt crisis, because some 95 percent of its bonds are domestically owned, but the demands of rebuilding could push Japan increasingly toward the foreign market.According to the calculations of Oguro and Sato, Japan would have had a debt-to-GDP ratio of 301 percent by 2020 had the disaster never occurred. Now, they project a ratio of 309 percent.

“It might be slight,” Sato said, “but the probability of government bankruptcy will increase.”

Macroeconomists who study disasters also acknowledge one variable that research doesn’t account for: government competence. Prime Minister Naoto Kan faces calls to use the disaster as a catalyst for long-delayed reforms, such as raising taxes, liberalizing trade, deregulating the energy sector and modernizing the archaic farming and fishing industries. But all of these steps face pockets of vocal opposition from politically powerful interest groups, and a brief period of post-disaster political unity has already given way to bickering. With even some in his own party pushing for Kan’s resignation, the prime minister has little political muscle.

And politicians fight over who can appear more generous to voters. Business as usual.

Though Japan’s parliament this month passed a $50 billion special budget, Japan will need several subsequent, and larger, special budgets to fund recovery in the disaster-hit area.

Kan’s government says the second budget could be ready by August.

But opposition parties, citing an urgency to deliver money to the battered region, want it to be ready by next month. Otherwise, they threaten, Kan will face a no-confidence vote. This could give Japan its seventh prime minister in six years.

“Japan is at a turning point,” Sato said. “What we need, ideally, is structural reform alongside reconstruction. But the other scenario is, there is no major reform. Then we will remain in a gloomy decade.”

via In Japan, the same old problems – The Washington Post.

Big words. But whether there is “reform” or not, I predict a gloomy decade if politcians have their way.