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Cabinet OKs Y5.5 trillion stimulus package to offset tax hike effect


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Yeah....that's not going to work the way you think, Abe-kun. The tax hike is going to cut into pensioners' spending and overall quality of life, make it tougher for working class citizens to merely get by, and drive down domestic consumption (which represents 60% of Japan's GDP, mind you) all across this nation. Oh, and drive up the already unsustainable debt by another 5.5 trillion.

But hey, this is what the Japanese voted for, right?

6 ( +6 / -0 )

Robbing Peter to pay Paul. Glad I sent all my yen home.

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No mention here, but some of that goes to biotech investment, which I think is great for Japan to stay competitive. The future of biotech is very promising, now especially that Japan has a few noble price winners.

-6 ( +0 / -6 )

Where are the payments listed to the Yakuza?

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French infrastructures are more than 100 years for mont of them and need no repair... Just spending for friends indeed... Will it one day end ?

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As for my household, my partner's work is super busy trying to meet the strict deadlines of government funded construction, working 40 hours (unpaid) overtime, 7 day work week....yet no pay increase, and most likely a 5,000 yen 'bonus' yet again. so I am not convinced this will help us regular folk. Hopefully if this is try's across the board people will wake and and call Abe on his false promises

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"Oh, and drive up the already unsustainable debt by another 5.5 trillion."

Logic fail. If the debt is "already unsustainable," then Japan's economy would have crashed by now. But it hasn't. How do you explain that the economy is growing while many of the economic indicators are positive?

You're not alone, though. The debt bugs have been consistently wrong over the last few years. Yet they stubbornly hold on to their flawed world view. Strange, eh?

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spending package worth 5.5 trillion yen in a bid to offset a tax hike that comes into effect next year and which critics fear will derail Japan’s economic recovery.

Why don't they just not enact the tax hike? If raising taxes is going to make people spend less, then logically they would want to keep taxes lower, and cut out wasteful spending from the government first.

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So they're going to increase the debt by 5.5 trillion to try and off-set financial difficulties? Does anyone else see the failure in logic here?

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Give the 5.5 trillion back to the tax payer...thats stimulation enough thanks!

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Japan may have the largest debt, but also has large asset. And J bond has the lowest interest rate among major countries. So, overall not that bad.

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Jeff. you are kind of right but just because JGBs and Yen are seen as a kind of safe haven (deflation, low unemployment and low overseas ownership of debt), once the worm turns we will very quickly see how sustainable over 250% debt is. I think the point is that there is little point raising taxes to (allegedly) help reduce the debt burden and then borrow more.....

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Smoke and mirrors.

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Abe and friends are simply squeezing the last drops of milk from a cow which is about to tip over. The 5.5 trillion yen will go to the usual big firms, who will return the favor by kicking back cash, or providing high-paying jobs to politicians' family members, and fat consultancy or lobbying positions to retired or defeated politicians.

Liberal, or consevative, the main purpose of being a politician is to redistribute wealth. Namely, from business and taxpayers to the politician's friends and family members. This is why a senator or congressman will spend millions to get a job which pays $175k per year. President Obama raised $630.000,000 for his first election, though his salary is $400k. Certainly Obama isn't much concerned with kickbacks, but he does return favors, and the political machines which get presidents elected find a way to profit, regardless of who they put in office.

In politics, it's all about the money folks. You have to pay to play.

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lack of vitality in this economy is wide spread and deeply embedded to the core, it is quite different from the slump U.S. experienced and Mr Abe copying Obama will not work here while cutting off ties with important economic partners due to Mr Abe's belligerent nationalistic views against China and Korea. this quick fix attempt is a clear bust and Abe must be blind to not see the faults of this ridiculous waste of money.

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I guess I'll raise my credit limit then spend more, that should pay off my credit card...right Abe?

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The Japan Times reports that the stimulus to offset increased taxes totals 18.6 trillion yen. Either way a lot of money. So much for shoring up social insurance.

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So they're going to increase the debt by 5.5 trillion to try and off-set financial difficulties? Does anyone else see the failure in logic here?

smith, or dear.

Your logic failed because the source of funds are from more than anticipated tax revenues this year and no additional JGB will be used for this package.

-5 ( +2 / -5 )

Kind of strange.... why do we need to hike tax and then give it back via stimulus? Thats not Capitalism! That is Communism! Controled and planned economy!

Again please use this on elderly care, eduation for kids, vocational training for the younth and etc! Don't put it into creating bombs, fighters and aircraft carriers.

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This is total BS from the government, taxing common man and then giving money to construction companies to build more roads and water ways that are NOT needed. This does nothing but line their own pockets

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So when do the taxpayers get anything? All is see is pockets being lined for big companies. Why is the public allowing this man to continue to run this country??

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Many economists believe that the government will have no choice but to cover the stimulus with extra JGBs and the talk of covering it with increased tax revenue is the usual Abe windbagging.

Oh really, dog? Back in October, the propose budget was 5 trillion and this recent announcement to bump another 0.5 trillion yen is based on guess what?

-3 ( +1 / -3 )

maybe JT should follow-up on Abenomics how is it going, perhaps the secret bill is also one priority part of it (?).

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Just a question that been bothering me for some time now.

many poster here always talk about the Japanese own the debt, but the number one buyer of the government bonds is the BOJ, so my guess is that the BOJ is the one the JG need to pay back right?

i mean they print the money, right?

so my question is this.

who own the BOJ? we all know is a private bank, so the US win the War, The US give japan they constitution, you going to tell me that the US is not going to take control of the Japan Central Bank too?

i think went the &%^* hit the Fan we'll know the truth of to whom japan have to pay back this debt.

why every time David Rockefeller come to japan no one know is like a secrecy, what he come to do here? not even the media here who love to talk about any famous person visiting japan say anything.

i just want to know who own the BOJ, we all know who own the Federal Reserve Bank in the US.

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I don't think they print money. I think they buy from city banks and the banks just make entries in the ledgers. Why do you think the US is going to control BOJ? Japan owns BOJ. Most J debt are owned by Japanese.

-1 ( +0 / -1 )

The Bank of Japan is a listed company on the Tokyo Stock Exchange (8301), a very little known fact. Yes you can own shares in it but the majority shareholder is guess who? The Japanese Government.

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Here piggy piggy, oink oink, here piggy piggy, the trough is about to fill up oink oink, here piggy piggy

This stinks to high hell!

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The logic of this is ridiculous. First, they take money from taxpayers, and then they claim that is justified because the spend the money they just took in order to "stimulate" us.

How about spare us this stimulation and keep the money in the economy? The idea that government bureaucrats are better able to allocate ressources than the people of the country is insulting.

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WilliB, agreed entirely. It's salt in the wounds to hear this extra spending and money-printing described as something that "offsets" the tax increase when in fact it only exacerbates it.

Being taxed more is bad enough. But I'd rather see them leave it at that than enact "stimulus" which will make things even worse for the typical taxpayer because the resulting inflation will take away the value of their savings.

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The old boy network in Japan still knows how to let the good times roll.

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Logic fail. If the debt is "already unsustainable," then Japan's economy would have crashed by now. But it hasn't. How do you explain that the economy is growing while many of the economic indicators are positive?

If everything is so positive, why increase the consumption tax in the first place? If eveything is so positive, why spend 5.5 trillion yen to stimulate the economy? If everything is so positive, why are capital and industry fleeing Japan? If everything is so positive, why has the central bank been forced to lower interest rates to nearly zero? If everything is so positive, why is the central bank selling bonds to itself? If everything is so positive, how is it that Japan has to spend 26% of all tax revenue collected just to pay the interest on it's debt, and nothing toward the balance? And if everything were going so well, why is the government 1,000,000,000,000,000 in the red? You are watching a slow-motion crash in progress.

If you go back to the infantile excuse that the government is the source of all money, I will laugh. If such were the case, there would be no need to borrow, issue bonds, and pay interest on these, would there? The government could simply print money to pay it's bills, just like Venezuela is doing right now. But try using Venezuelan currency in a store in Caracas, they'll laugh in your face and ask you to pay in dollars or euros.

The debt is not sustainable. Despite the so-called growth this year, the government still spent much more than it collected in taxes. Next year will be the same, but worse, because next year there will be fewer people working and paying taxes, and this will continue for the next several decades.

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GO GO stock market !

I <3 Abe, please keep that printing press going

Come on exchange rate hit 110~120 JPY per USD pleaseeee

The good times be coming

Just ride the wave guys, and don't worry about the eventual crash, cause the crash is coming regardless if the stimulus or not.

-3 ( +0 / -3 )

"The debt is not sustainable."

If that is true, then how is it being sustained? "Unsustainable" means just that: it can't continue to function. But it does. I'm curious how people of your world view think this is even possible, especially amid the world's lowest bond yields and positive GDP growth.

My business is swamped with new work from private sector clients. Why are they placing so many new orders? If you were right, business confidence would be so low, that capital would be fleeing.

A few years back, your ilk predicted skyrocketing bond yields and hyperinflation. You were wrong, wrong and wrong. Time to find a new "theory", I'd say.

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