According to this article, Japan reached an enormous debt/GDP ratio of about 250%.
The first two answers from here illustrate more about the structure of the debt. My highlights are:
- most Japanese Government Bonds (about 90%) are held by citizens of Japan
- much of that debt is owed by one branch of the government to another, net debt held by the public is only 134 percent of gross domestic product, not the widely quoted figure of 240 percent.
- it has a tax rate of just 35% of GDP, so it could in theory raise taxes by another 10% to pay off debt if it did become a problem
Question: since the tax rate is fairly low and a significant part of its debt is owned by its population, why not raise tax rates instead of borrowing from population?