12  While it is difficult to judge whether this decline in interest rates is large or small, what is clear is that, if the government deficit led to a rise in interest rates, this would pose a major problem, as it would reduce important investment and damage Japan's economy in the future; on the other hand, if the government deficit does not lead to a rise in interest rates, it also does not reduce important investment, and would not be a major problem.
Arguments That Low Interest Rates Cause Problems In addition to the debate surrounding low interest rates mentioned earlier, it has been argued that the low interest rate policy allows inefficient firms to survive, leading to a decline in productivity and, consequently, a decline in the natural rate of interest.