Last week I spoke to a non-Japanese economics researcher employed by a Japanese university. He said he was working on a study that compared Spain's current fiscal crisis to Japan's economic situation as a means of determining if the former would suffer the same long-term problems as the latter. I mentioned that the two countries' situations seemed dissimilar because of Japan's high savings rate, and he countered that the biggest difference was really the "work ethic."

It's a loaded term. The news media has been filled with stories of ballooning unemployment in Spain. In comparison, Japan has much lower official jobless numbers and a growth rate that impresses people like Nobel Prize-winner Paul Krugman, who said last spring in an interview with the Financial Times, "When people ask: Might we become Japan? I say: I wish we could become Japan."

These optimists are referring to per-capita income and consumption, which they believe is relatively healthy for an economy that pessimists believe has been on life support for two decades. The big problem is deflation, which puts downward pressure on income. That's why the consumption-tax increase bothers so many economists, since it will stifle consumption even more.