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Diet enacts record ¥107.60 tril budget for FY2022

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Who buys those bonds?

9 ( +9 / -0 )

a quarter of it goes into paying their debts,

No it doesn't. Japan's government and the BOJ have a monopoly to print yen. They don't have to "borrow" any of it.

the nation's high dependence on borrowing

Huh? The BOJ has been buying nearly half the "debt," with the interest payments on it remitted back to the MoF. How is that "high dependence"?

 the government is committed to achieving a primary balance surplus by 2025,

What would that "achieve," apart from putting a drag on potential economic growth?

-17 ( +2 / -19 )

Japan's Diet enacted Tuesday a record 107.60 trillion yen ($900 billion) budget for fiscal 2022 to finance measures against the coronavirus as well as rising social security and national defense costs.

And many a head was bowed that day. Now off to celebrate secure in the knowledge that the public's wealth is well spent!

Asked if he has any specific ideas about a fresh stimulus, including a proposal floated within the ruling coalition to provide 5,000 yen to each pensioner,

A staggering display of generosity; especially given that Kishida has been on tour handing out "aid" to countries around the world. Well, the pensioners usefulness as a human resource has run out for the LDP.

10 ( +11 / -1 )

More money printing, cost of living goes up, wages still won’t go up. Great work mr Kishida, I’m sure all low paid workers are really happy you’re making our lives even more difficult..

17 ( +20 / -3 )

Who buys those bonds?

I've heard Japanese buy most of those bonds every time.

10 ( +11 / -1 )

No it doesn't. Japan's government and the BOJ have a monopoly to print yen. They don't have to "borrow" any of it.

Close but no cigar. It's 50%, the rest of the bond holders are pension funds, insurance, banks, households, and 7% foreigners (mostly China).

I think it's a rather worrying trend that despite the in your face demographics blackhole (increasing old age to working age ratio), and Japanese wealthy (43%) seemingly profiting from poor government fiscal management, the average Japanese salaried tax payers' uphill battle continue.

Already, we have retiring salary men adopting post working age hustle, young people reluctant to enter the workforce preferring youtubing or other gig income. Together with a nationalistic bent on keeping foreign workers out, things don't look good for the average Japanese taxpayer.

This is all before (on top of QE) you add-in the BoJ's qualitative easing as well (ie buying of bad debts, propping up poorly performing companies etc.), you know it's stacked towards the asset rich, and the asset poor are just working donkeys. Seems not much has changed from the samurai era.

11 ( +15 / -4 )

So the reason for the budget ballooning are: covid (China), defense (China). Yet no allocation of resources to help Japanese businesses to decouple from China. Uniqlo, Nidec, Toyota .....on and on, continues to shift capital to China so as to make Japan more indebted, so they could then lend to government and profit. How's that even fair let alone good for the nation.

2 ( +6 / -4 )

@Sh1mon M4sada you are spot on!!

3 ( +4 / -1 )

Asked if he has any specific ideas about a fresh stimulus, including a proposal floated within the ruling coalition to provide 5,000 yen to each pensioner, Kishida said the government will carefully monitor economic conditions as it weighs its options.

Usually I’d say this is blatant vote buying, but is that how cheap it comes now - just 5,000?

So if it’s not an attempt at keeping the votes of pensioners, then I have to ask why just 5,000? What good is that? What is it supposed to fund?

4 ( +4 / -0 )

It's 50%, the rest of the bond holders are pension funds, insurance, banks, households, and 7% foreigners (mostly China).

The pension fund is government owned and managed. My point exactly. The others buy Japanese bonds mainly as somewhere to park their yen cash. Why do you think J bonds still find buyers with yields very much near zero?

wages still won’t go up. Great work mr Kishida

The prime minister doesn't decide on and pay your wages. That's up mostly to the private sector. Blame them and the market reforms of a few years back that enabled the corporations' wage-suppression policies.

-4 ( +3 / -7 )

The government expects record-high tax revenue of 65.24 trillion yen

A pity that spending is to be 42 trillion yen higher than tax revenues have ever been.

And the yen plummets.

7 ( +8 / -1 )

The defense money is being misappropriated. The bigwigs are going to be getting their rockets off but who's going to stop a million men from coming over and pummeling the women? If they're so worried maybe they should distribute guns to everyone.

-1 ( +1 / -2 )

So basically, they gave themselves a raise?

2 ( +6 / -4 )

This is all before (on top of QE) you add-in the BoJ's qualitative easing as well (ie buying of bad debts, propping up poorly performing companies etc.), you know it's stacked towards the asset rich, and the asset poor are just working donkeys

QE is a UBI for banks and rentier capital. While 5000 yen to pensioners will be debated and considered.

Japan is not unique in this respect either among the G7 nations.

Socialism for the rich, rugged free market capitalism for the rest.

3 ( +5 / -2 )

Why do you think J bonds still find buyers with yields very much near zero?

Do they? I thought Japanese corporations sent a pretty clear message. Not interested in even negative rate.

https://www.investopedia.com/articles/markets/080716/why-negative-interest-rates-are-still-not-working-japan.asp

-2 ( +1 / -3 )

The old boys are doing their best to safeguard their own interests leaving in the end the average Taro with nothing in his hands.

5 ( +8 / -3 )

Socialism for the rich, rugged free market capitalism for the rest.

I am “rich” by Japan standards, but Japanese big government socialism isn’t restricted to me by any stretch of the imagination. Indeed they did actually exclude me from a recent government handout due to income threshold.

And I would love to see free market capitalism here in Japan.

Government spending 40 trillion more than tax revenues each year accumulating massive debts that grow endlessly, while the economy does not, is not my free market capitalism.

Less government spending (not more), less regulation of people’s economic decisions, less central bank money printing to finance the government spending, elimination of even one subsidy program - show me these things before you start to claim that Japan has anything resembling free market capitalism.

-7 ( +2 / -9 )

wondering about happiness of pensioners if they will get gorgeous 5000JPY OMG...what a generosity...

0 ( +3 / -3 )

I am “rich” by Japan standards, but Japanese big government socialism isn’t restricted to me by any stretch of the imagination. Indeed they did actually exclude me from a recent government handout due to income threshold.

Then you must not be a stakeholder in one of the financial institutions receiving QE, a hotel owner receiving subsidies and pandemic stimulus money or a construction company receiving crony contracts as more "stimulus".

All that money in the budget is going somewhere, and it is not into the pockets of the workers of Japan.

7 ( +10 / -3 )

And this is why, I don't have my savings in YEN.

I convert my salary right away and just have enough to pay my bills.

Don't hold YEN it's going to collapse.

5 ( +10 / -5 )

"" The government expects record-high tax revenue of 65.24 trillion yen, ""

Wouldn't be much easier to just STOP collecting taxes and sucking the blood out of the middle hard working class the have a smaller budget?!?

107.6 tril. minus about 50 tril. of the middle class taxes since the rich do not pay any taxes and know how to evade paying it then the government will only need about 57.6 tril. to keep running and the Japanese middle class will have a better life.

0 ( +1 / -1 )

Mmmmmmm pork barreling........

-1 ( +3 / -4 )

How about experimenting with a NO INCOME TAX system that will benefit all, more than 20 nations around the world are doing it .

The old system of collecting tax from the poor and giving it to the rich is destined to fail.

5 ( +5 / -0 )

@sh!mon

Not interested in even negative rate.

Which is what Japan's authorities want. They want Japanese companies to be spending their yen on their workers and on capital investment, and for financial institutions to take on more risk -- rather than locking up their cash in govt bonds.

Less demand for j-debt? No problem, the BOJ will buy it and there are still lots of people who need a safe way to park the yen cash they earn through trade.

"Servicing the debt" is a non-issue here.

-2 ( +3 / -5 )

And this is why, I don't have my savings in YEN.

I convert my salary right away and just have enough to pay my bills.

Don't hold YEN it's going to collapse.

Yes, I quite agree. For a long time now I have kept all my money in Swiss Francs and Dollars. The Yen is poisonous and now is in free fall. 121 to the dollar right now and dropping rapidly. Nobody should be holding the poisonous yen now apart from everyday needs.

4 ( +4 / -0 )

"Servicing the debt" is a non-issue here.

What are you talking about you? The country is spending 24.34 trillion yen for debt-servicing, which means that it is costing Japan the equivalent of the GDP of some counties out there in paying back its debt on a yearly basis. That's a lot of money that is not going to be used to serve the population of the country. You speak like Japan is operating in a vacuum. No it doesn't. It has to pay its debt back like any other country whoever owns it.

Moreover it's not like the country is doing well, isn't it? it has been in an economic stagnation for three decades with a massive building debt and an aging population unable to drive an economical growth required to sustain it. Why do you think that Japan's government is increasing taxes if everything is fine?

-2 ( +2 / -4 )

MachidaToday  08:27 am JST

So basically, they gave themselves a raise?

That's why you see them bowing in the photo! Sumimasen, we decided that we are only going to be alive for another 10 years and want to enjoy the rest of our lives with your tax payers money. The next elected LDP party will take care of this mess, we promise!

0 ( +4 / -4 )

The total amount for defense will be 5.40 trillion yen for FY 2022, aiming also to develop new technologies to counter China's military expansion.  

Even the most advanced weapons systems become obsolete overnight with the advent of another new weapons system developed by one's adversaries. Can Aegis on the sea and Aegis ashore counter-attack incoming hypersonic cruise missiles reportedly having been developed by Russia and also China? Russia is said to have actually used them in Ukraine. 

An arms buildup knows no bounds and a military budget with which to develop new weapons balloons and inflates like hell, hurting the country itself and hastening its decline.

2 ( +3 / -1 )

Japan's stimulus for citizens and residents is the most appalling and selfish lack of funding !

Especially as Japan is touted as the world's 3rd strongest economy.

Cruel raising of prices for everything and no stimulus checks .

And work until you cant for the aging population.

Furthermore appalling is how generous Japan government has been to provide funding outside of Japan but not inside Japan.

Kishida is certainly trigger happy and not in a good way.

0 ( +2 / -2 )

Its a bit difficult or impossible for Japan to continue calling itself a pacifist nation after all the sanctions and stolen assets against Russia.

Financial assistance for Ukraine crisis is also funding war.

Joining the gang of nations wielding a Financial war against Russia.

Not pacifist really is it.

All military spending.

Alot of it coming from tobacco sales which is a poisonous habit detrimental to everyone and the environment.

-5 ( +0 / -5 )

Well, the pensioners usefulness as a human resource has run out for the LDP.

Well, not to worry...they will still reliably re elect the same LDP deadwood so it's all dandy.

Kishida has said the government is committed to achieving a primary balance surplus by 2025"

Lol indeed. Goal to be pushed back by a decade in 2024.

0 ( +3 / -3 )

All this profligate printing makes cryptos look better by the minute.

-3 ( +1 / -4 )

to finance measures against the coronavirus as well as rising social security and national defense costs.

cut off defense spending and it 30% less burden on next generation. So simple.

-1 ( +1 / -2 )

Then you must not be a stakeholder in one of the financial institutions receiving QE, a hotel owner receiving subsidies and pandemic stimulus money or a construction company receiving crony contracts as more "stimulus". 

Indeed I’m not, but I don’t think your inference that those types of people are all rich is true.

And it is absolutely not the case that all of those things are free market capitalism. All of those things are big government socialism, which I would like to see an end of. It seems you would too, but are confusing those policies with free market capitalism.

Free market capitalism doesn’t involve government spraying records of (our) money about the place willy nilly.

1 ( +1 / -0 )

The continued money printing (MMT) will result in currency collapse. you can't borrow your way to prosperity. if you could we wouldn't see constantly rising deficits.

-1 ( +1 / -2 )

107.6 tril. minus about 50 tril. of the middle class taxes since the rich do not pay any taxes and know how to evade paying it

I consider myself to be rich, but pay the taxes I owe. Indeed it’s hard not to pay tax on your income, when it is deducted at the source, or the consumption tax when it is included in the price of stuff one buys.

Given that I am relatively rich by Japanese standards, the exceedingly rich are far fewer in number and even if they were evading tax illegally, they aren’t going to account for much of the 107 trillion yen that is going to be spent anyway.

Personally, I absolutely think mortgage loan tax deductions and other tax schemes that favour rich persons ought be abolished. It’s absurd that lower income tax payers who can’t afford to buy a home see some of their tax burden go towards millions of yen of tax returns to richer home owners.

Such programs ought be eliminated, people left with more of their own money and let the economic cards fall where they may.

0 ( +0 / -0 )

"Servicing the debt" is a non-issue here.

On that topic of local currency defaults which according to some can’t happen, this came to my attention recently:

https://www.bankofengland.co.uk/-/media/boe/files/statistics/research-datasets/how-frequently-do-sovereigns-default-on-local-currency-debt.pdf?la=en&hash=62205B4AB0B476C576442F70C03F61E1915EA9C1

-2 ( +0 / -2 )

All this profligate printing makes cryptos look better by the minute.

In previous metals, gold hit all time highs versus the yen recently so gold has been in the local news… usually when that happens it’s time to sell but personally I’m not so sure about that at this moment. I suspect it may depend on whether peace breaks out in Ukraine (hope so…), and for how much longer the central planners let inflation run wild.

0 ( +0 / -0 )

We don't have any money. How is this going to be paid for? And I'm not asking to be humorous!

0 ( +2 / -2 )

"We don't have any money. How is this going to be paid for? And I'm not asking to be humorous!"

You could always search for a proper "expert" opinion?!

"Japan’s economy is stronger than many realise"

"Many in the West said Japan’s debt was unsustainable and the Bank of Japan (boj) should do more to boost inflation. In 2013 the boj’s governor, Kuroda Haruhiko, embarked on dramatic monetary easing. The debt hovered around 230% of gdp. A strange thing ensued: no fiscal crisis struck, nor did inflation come near the 2% target. “The standard textbook on macroeconomics needs an additional few chapters"

"Debt has not turned out to be such a problem. “What we thought used to be fiscal limits are no longer fiscal limits,” argues Adam Posen, of the Peterson Institute for International Economics (piie) think-tank. “[Japan] has forced people to confront reality: the interest rate can stay below the growth rate for very long periods.” The public debt has been above 100% of gdp for almost 25 years without causing a crisis."

"It helps that the country borrows in its own currency, the government has big financial assets and the boj holds a big share of the debt"

"https://www.economist.com/special-report/2021/12/07/japans-economy-is-stronger-than-many-realise"

JeffLee is actually one of the few who actually can see beyond the fog.

Well-done Sir.

-2 ( +2 / -4 )

“Maybe Western economists who were so critical of Japan circa 2000, myself included, should go to Tokyo and apologise to the emperor,” Paul Krugman, an economist, tweeted in 2020. “Not that they did great; but we did much worse.”

"https://www.economist.com/special-report/2021/12/07/japans-economy-is-stronger-than-many-realise"

-4 ( +1 / -5 )

The public debt has been above 100% of gdp for almost 25 years without causing a crisis."

Japan has been a sub average economy for 25 years, seeing its place in the world decline significantly.

And Fukushima Daichi operated safely for years before the inherent risks there precipitated into a disaster.

one of the few who actually can see beyond the fog.

See as far as the fog, rather.

-5 ( +0 / -5 )

"Japan has been a sub average economy for 25 years, seeing its place in the world decline significantly."

Yet still, World's 3rd largest GDP, amongst other attributes.

Sorry but people like Krugman, the IMF, WB and any other Financial Institutions you can think of all disagree with JT "expertise"!

Japan is just too BIG to FAIL.

World's Largest Creditor Nation, pushing 30 years on the trot.

For a reason.

Why aren't JT "Prophets of Doom" leaving in droves if things are that bad then?

-7 ( +1 / -8 )

The continued money printing (MMT) will result in currency collapse.

Why? How?

Japan has been a sub average economy for 25 years...

I was here 25 years ago. Infrastructure, housing, environment and a host of other important factors related to quality of life are vastly better now than then. As the visiting British member of Parliament said about 15 years ago: "If this is a recession, can we have some?"

-1 ( +3 / -4 )

Krugman… I am confused, is that supposed to convince me of my views or otherwise? This is the same Krugman, right?

https://www.politico.com/story/2016/11/krugman-trump-global-recession-2016-231055?_amp=true

25 years ago, Japan was 15% of the global economy. Left as an exercise for the reader to determine how much it is now.

-2 ( +1 / -3 )

Yet still, World's 3rd largest GDP, amongst other attributes.

I don't know Rick, it looks fake.

Japan admits overstating GDP component data for years

https://asia.nikkei.com/Economy/Japan-admits-overstating-GDP-component-data-for-years

1 ( +3 / -2 )

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