I disagree with people who think that net government debt is necessarily a better measure of Japan's public debt problems. According to MOFA, most of the government's financial assets are held in the social insurance funds. (Sorry, I can't find the actual numbers in the time I am willing to devote to this comment, so the qualitative statement at this link http://www.mof.go.jp/budget/fiscal_condition/related_da
ta/sy014/sy014d.htm is the best that I could come up
with.) But if it is appropriate to net the JGBs in the social insurance funds against public liability, then should we not also count towards public liability the net liability of the social security funds, i.e.
current value of assets minus the current value of present and future claims against the social security system that correspond to existing assets (difficult to determine in practice, sure, but that's no reason to ignore them altogether)? Unless you assume that the social insurance system can keep raking in enough premiums to ensure that those JBGs never have to be redeemed-a dangerous kind of assumption, if you ask Bernie Madoff-I don't think it is. And speaking of premiums reminds me of another problem. If and when, as Greg Noble says in his 2012/02/21 comments on JGBs-which I find convincing overall BTW-"the government will face a steadily rising risk premium,"
won't the social insurance funds have to write down those JGBs to market? It's become hard to do an Olympus and get away with it, you know. In a similar vein, I wonder how BOJ's JGBs are accounted for. I could go on, but I think that I've made my point.

Caveat: I am neither an accountant nor a broker, so I stand more than ready to be corrected.