The education system, as the article points out, is underfunded not because they don't have the money, but because they're spending it on other things.
And one sure method to destroying your way of life is to let a bunch of people in who are there for the money and aren't particularly interested in your way of life. If you're a Japanese person in Japan and you don't want to live in another country, why would you want other countries to live with you?
Japan is a resource-poor country without much arable land. They could stand to have a smaller population. From what I can see the only real downside to a smaller population is military power, and in the age of nuclear weapons I'm not sure how much it matters, particularly for an island nation.
While Japan may not presently be gutted in terms of GDP, I wonder if we are witnessing the slow rotting from inside right now.
The older generations are demanding to be supported by the younger generation in a number of ways, but they are not giving the younger folks the means to do so via decent-paying jobs and jobs that are stable enough to encourage the start of a family (i.e., future generations).
Right now Japan is printing money hand over fist to try to make something -- anything -- happen economically. I don't see that it's working, and I wonder how long they can keep doing this before they take a hit on the economic side (GDP or otherwise).
If Japan can make it 25-30 years with something like their current GDP, then they will be fine -- their population will have shrunk, and there will be no big bubble on the top of their population by age pyramid. That said, think their economy will take a huge hit a some point in that timeframe.
Do you see much positive hope on the economic side moving forward?