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Japan’s economy has likely succumbed to a new recession, the Japanese Cabinet’s business chief, Shigeru Sugihara, said Aug. 6, concluding five years of economic growth for the world’s second-largest economy. Japan’s sixth recession since 1992 will push the country even closer to the inevitable economic disaster it faces as a result of its skewed financial system and utter dependence on foreign energy and commodities.

The recent history of Japan’s economy is one of deep debt, multiple recessions and government bailouts funded by deficit spending. After World War II, Japan’s economy got up and running by means of banks happily giving big loans to domestic companies while offering consistently low interest rates to all borrowers. The idea was to jump-start Japanese business with easy cash and, most importantly, to employ as many people as possible to ensure social stability. Over time, this emphasis on high employment led to a relative de-emphasis on efficiency and profit. Freely flowing credit kept everyone afloat. As corporations grew by borrowing more and more money, the fates of banks became tied to the corporations they were supporting. With wide and easily available credit for all, numerous rich buyers bid up the price of everything, especially property, until the bubble burst in 1991 and recession followed.