Is Japan better than us?

In late 1980s Japan built up an enormous asset price bubble due to low interest rates. Property prices were sky high and the Nikkei was above 35,000. The stock market crashed in 1991, the property market in 1992 and Japan went into a period of deflation from 1999. Inflation, that is the Consumer Price Index, was + 1.27% in 1993, - 0.12% in 1995 and + 1.76% in 1997. From 1999 inflation was negative, which means that prices were declining, till 2005. Inflation was -0.33% in 1999, -0.8% in 2001, -0.25% in 2003 and -0.27% in 2005. From 2006-08 inflation was barely in positive territory and then again went negative from 2009-11. It has been +0.8% so far this year. Falling prices caused people to stop buying, thinking that prices will drop further which meant that companies were unable to make profits leading to rise in unemployment. Fear of unemployment made the people spend even less as they tried to increase savings. In order to discourage savings the government reduced interest rate to 1% in 1995, to 0.5% in 1996, to 0.25% and then to 0.10% in 2001 where it has been till today. This means that if you have $1000 in a bank it will earn you just $1 in one year but since prices were falling the Yen was gaining value so people refused to spend. The government did everything to stimulate the market including buying back bonds to increase liquidity and even gave away money in the form of vouchers to senior citizens to increase spending. All this spending made government debt soar. Debt to GDP ratio has been rising consistently. It was 74.9 in 1993, 125.7 in 1999, 157.5 in 2003, 170 in 2005, 192.7 in 2009, 211 in 2011 and is set to reach 230 this year. To set it in perspective Spain has a debt to GDP ratio of 90, Italy is at 120 and Greece was at 170. Perhaps the only positive factor during all this time was that Japan ran a trade surplus continuously from 1981 to 2010. The Japanese economy is export oriented but also if people refuse to spend imports will naturally fall so that balance of payment will remain in surplus. Japan has foreign currency reserves of $1.273 trillion. Japan used to be the second largest economy in the world but has now been relegated to third place by China. You would think that with all this doom and gloom and with a ballooning government debt the Yen would be plunging but the opposite is true. The Yen was 111 to the dollar in 1993, 130 to the dollar in 1998, 125 to the dollar in 2002, 109 to the dollar in 2005, 93 to the dollar in 2009, 80 to the dollar in 2011 and 78 to the dollar today. The combination of the tsunami, floods in Thailand and the strong Yen meant that Japan had a trade deficit for the first time in 2011 after 3 decades. Is there a lesson for India? The lesson is that if your currency is buying 10% less every year because of inflation its value is bound to fall. Idiots never learn.