Reagan Star Wars and Japanese financing of US debt

Reagan's SDI funded via Japanese loans; yen appreciation from 240 to 100 per dollar meant US repaid at ~40 cents on the dollar. Tom's economics-of-currency lesson.

The Japanese took that sort of personally, and they started improving things. They started with steel mills, then they went to shipbuilding, then they went to automobiles. When I spent my year in Japan in the mid-80s, 75% of the Japanese economy was based on shipping automobiles to the United States. In the early 1980s, Ronald Reagan decided he was going to have a Star Wars initiative. We were in the middle of the Cold War, and he was going to beat those Russkies by building an international Star Wars missile defense and offensive threat, and it was going to cost 500 billion dollars, which was a lot of money back then. We didn't have the money. The Japanese were more than happy to loan us the money so we could buy their Toyotas.