Abe's ex-adviser opposes tax hike; fears economic crisis

Fiscal reforms have to happen the longer it takes the more painful it will be, but it's necessary for the economy to move forward. Government expenditure needs more transparency and reduction of waiste. Raising tax while wages shrink that's just not going to work. Cut spending on frivolous pork barrel projects, implement a cost benifit mechanism that all government spending must pass. Lower taxes at all bureaucratic levels. Then people will have extra money to spend, benefiting the economy.

Japan isnt under threat of "an economic crisis." Financial crisis, yes, but that would have nothing to do with fiscal policy. The tax hike should only happen if certain growth and inflation targets are met.

Without a significant increase in minimum wage, the tax hike could lead to a depression. People are already struggling here. Abe will pretty much kill any chance of population growth as well as the population is squeezed financially even more.

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The average Japanese cannot not afford a hike in consumption tax. It will paralyze the economy.

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Aly Rustom  :Without a significant increase in minimum wage, the tax hike could lead to a depression.

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YOu got it !

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The first tax hike was a bad idea and so will a second one. If they didn't raise the rate to 8 percent before I think Japan would of turned to a booming economy.

Most companies still have not given raises to Japanese workers since the last tax hike; if they did it, the raise would not match their previous PP due to the hike.

One more hike and the arcades will be more empty, people will stop eating out businesses will go bust and the only way to sell products cheaper is to use food substitutes and smaller portions like last tax hike. The government is literally making Japanese food products and drinks crappier as they have done with beer; creating happoshu and 2dai beer.

Cut spending already.

jail for abe. bozo doesn't have a clue. nearly a decade of failure. fall on your sword abe

A former economic adviser to Japanese Prime Minister Shinzo Abe said on Thursday that an increase in sales tax planned for October should be shelved until the economy puts a decisive end to deflation, or it could trigger an economic crisis.

I don't get it, will the economy miraculously become vibrant if there is inflation and no corresponding increase in spending power of consumers through wage increase, the answer is clearly no, the economy will be dealt a death blow.

CrickyToday  07:53 am JST

Fiscal reforms have to happen the longer it takes the more painful it will be, but it's necessary for the economy to move forward. Government expenditure needs more transparency and reduction of waiste.

I don't think the government considers any money wasted if it's going to people who will vote for LDP candidates or fund their re-election campaigns, e.g. the business owners who get all those public works contracts. The status quo suits government politicians just fine; they have no real incentive to reform anything.

And round and around we go. You can't expect stupid policy makers to come up with smart policies.

Abe is a weaselly little coward who will certainly delay the consumption tax rise. He will then call an election to capitalise on his lack of backbone.

"We tend to worry about external factors, but if the tax hike goes ahead despite a fragile economy, that could trigger a'Lehman shock' in Japan as domestic demand takes a hit," Honda said.

If Japan cannot withstand the rate increase from 8% to 10%, then the economy is a basket case to begin with. Face the reality, quit pretending!

The previous tax increase to 8% from 5% in April 2014 hit consumers hard and triggered a sharp slump in the world's third-largest economy.

But nothing like a Lehman shock, if one is serious, and there was a growth bump before the hike occured. 

It's like a road bump.

But sure, if you don't want to pay for all the public spending, cut the public spending instead to make ends meet. I'd be done with that.

Abe has prioritised economic growth over fiscal reforms

Were the results worth it?

Shelving the planned tax hike would cause a budget gap in funding Abe's promised spending plans 

Wrong. It'll just make the gap a little bigger, because it is already massive.

Honda said the government can issue deficit-covering bonds by taking advantage of super-low interest rates. The Bank of Japan should then ramp up government bond purchases under its quantitative easing programme, he said.

What a sham!

The already twice delayed tax increase is dead in the water. Rightly fearing another delay would shred whatever little remaining credibility there is, our elitist ‘betters’ just haven’t around to letting us know and the rest of us peons are left dangling. Anywhere else, repeated failures on multiple levels similar to what this government has demonstrated, would’ve been dealt with expeditiously with the mother of all electoral chastisements. Sadly, Abe and his gang is still with us, still trying to disprove Einstein’s theory of insanity.