With the world's oldest society (medium age 42), aging is a prominent issue in Japan, as 20 per cent of Japanese are over 65, and a likelihood of 28-35 per cent of the population over 60 by 2025. The costs associated with the old contributed to 1/4th of the 2002 budget deficit, against a background of decling tax income for the state.

The three authors here have conflicting opinions over the aging population and how they affect state economy. These discussions not only help provide an understanding on Japan's aging population, but also longstanding Japanese policies that have both promoted Japanese economic growth and perhaps slowed down the economic recovery from the recent recession.

1. State benefits to the aged and general population.

Compared with the US, the Japanese state spends relatively less on the Japanese people. Under the "Lifetime employment system" introduced after 1960, companies, not government, provide social support to workers. As Hewitt points out, a combination of mutually supportive employer practices, commercial regulation, and labor and trade law emphasized the creation and preservation of jobs—even inefficient ones. This welfare society approach to social welfare also helps to explain the existence of numerous mom and pop stores in Japan that, despite the huge department store chains, still occupy a considerable share of the Japanese retail market, creating a Byzantine style distribution system in Japan that foreign companies find hard to get in.

Perhaps the exception to the rule is the public pension system. Public pensions were established in 1959 to relieve working class anxiety about retirement. Pension was doubled for its recipients and free medical care for the elderly was established in the 1970s for those who did not benefit from the postwar economic takeoff because of retirement. The public Long Term Care Insurance program, designed for the elderly who required institutional care, was passed in 1997 and went into effect in 2000. But Japan has hardly any social network for those below the poverty line or unemployment benefits.

The relatively little the state spends on the Japanese people enables the state to invest much money targeted at key industries that have helped the Japanese economic takeoff after WWII. (see Postwar economic takeoff)

Because of the rigid untransferability of private company pensions until recently, most Japanese save in their middle ages for retirement, and the savings rate in Japan has historically been high, averaging 20-30 per cent per household, and around 10 percent even in economic recession today (see Japan's recent economic decline for explanation of recession)

2. Consumption of the aged during the economic recession: the burst of another bubble?

In 1992-1993, an economic recession took over Japan, and theJapanese economic bubble burst (rapid development 1960s-1980s, like a soap bubble growing bigger, finally bursting). The government, in order to maintain the welfare society, has been trying to bail out banks and companies, in particular the banks that are expected socially to help the smaller companies. Some companies have been allowed to go bankrupt, but some 17 million people are artificially kept on the payroll to prevent bankruptcies of their companies. The government therefore becomes more indebted than ever before and it has been partially sustained by the bonds the aged purchase from the state, therefore further economic decline or volativity of bond returns will have a tremendous impact on the retirees.

3. Relationship between aging and economic recession

While Hewitt argues for a correlation between an aging society and economic recession (decline of consumption, slower adaptation to newer technology, high ratio between retired and working populations, high medical costs), Campbell and Usui see it differently. Campbell believes the relatively good public pension system enables Japanese not to fear old age and continue spending through their middle age years, therefore contributing to consumption , something vital to the economic revival of a consumer society. Usui poses a counterargument of higher productivity because of the information (or Post-Fordist age in her words) age hence the total possibility of supporting the aging population by the young without draining national economy. Continued consumption and relative health of the aging population will also help boost Japanese economy to Usui.