politics

Deep in debt, Noda rolls the dice

26 Comments
By Tomasz Janowski

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© (c) Copyright Thomson Reuters 2012.

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26 Comments
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However, when we look at it from the point of economy, it is not a right answer to increase sales taxes at the time of recession.

If that's the case there will never be a time for Japan to increase taxes, better look at austerity for the over 60's and public service. No chance.

3 ( +4 / -1 )

Japan spends half of its tax income just to service its debt. Each year it adds more than the combined gross domestic product of Greece and Portugal to its debt pile

Yup, just keep paying taxes so 1/2 of it can go to service the debt of a generation that lacked the courage to face reality and just kept sticking their heads in the sand. And also to pay for their pension and medical costs. Japan is in a serious spiral caused by a complete unwillingness to deal with problems head-on.

3 ( +4 / -1 )

the difference between Japanese debt and other countries debt is Japanese debt is over 80% locally owned. Meaning Japan is basically on its own to get out of it.

Head in the sand for too long, gonna bite you real soon.

3 ( +3 / -0 )

deckchairs on the Titanic? "Iceberg dead ahead"

2 ( +2 / -0 )

Why don't they repeal the lower corporate tax rates that went in this year before they ask the people to suffer?

Because that is likely to make their friends suffer with a higher tax rate. ;)

2 ( +3 / -1 )

we are now in a state in Japanese politics where parties get more help from the opposition than from their own party! this is funny to watch.

1 ( +2 / -1 )

I always knew that Noda would pull through! I had JPY2000 on him staying at least 10 months as a prime minister of Japan. This must be some sort of record!! Proud day for Japan! He might even make a full year!! Just think about it!

Spudman, a little mean to compare J-gov with Titanic. Titanic at least had a captain who could say the final word. Titanic also had a direction.

1 ( +3 / -2 )

Prime Minister Nodal, here's an idea! Forget about your ridiculous tax-hike idea and stop spending tax-payer money on ventures and donations (to the IMF, for example) the country can ill-afford to make at this time!

1 ( +4 / -3 )

shane7177Jun. 05, 2012 - 11:56AM JST

LOL! Look who's talking....! Foreigners...Guys how many of us can vote here..???Even though having a PR wont work...Talking, posting views won't make a difference anyway... Be practical and just watch! If there's a tax hike you gota pay same like the Japanese do! no complains and who do should go back to their country then - that's the japanese way. isn't it???

Absurd. If Japan gets off the cliff, the rest of the world go off the cliff as well. This is not just a Japan issue, we are all linked together in global economy. Your thinking may work if Japan wants to go back to closed country like NK.

1 ( +1 / -0 )

The big risk is that while Japan today can still satisfy all of its borrowing needs at home and at very low rates, delays caused by the political gridlock could leave it unable to do so for much longer.

That is the problem. Loud and clear. Too much politicking. Geezzzzz.... 6 Prime ministers in 5 years. Sound like a doctor doing a trial and error with medicines in treating a disease. It the meds doesn't work, change it. If it does, continue it. hehehehehehehe Japan is in deep debt and still can donate billions to IMF.... can bail TEPCO whose foriegn investors shares are suspiciously bought.... can spend billions in mentaining US Military base that should have left years ago.... Lord have mercy...

1 ( +1 / -0 )

The big risk is that while Japan today can still satisfy all of its borrowing needs at home and at very low rates, delays caused by the political gridlock could leave it unable to do so for much longer

. Japan has been borrowing from your future in the past 5 decades.. They took your dream and hope away from you. If you have been using your parents credit cards, your parents will eventually say "NO WAY" to you, then what do you do?

1 ( +1 / -0 )

Things must be viewed from two aspects- finance and economy. In view of Japan's national debts and increasing social security expenses, it is necessary to increase sales taxes. However, when we look at it from the point of economy, it is not a right answer to increase sales taxes at the time of recession.

0 ( +2 / -2 )

Recently there was an article on this site that said something along the lines that the average household savings in Japan is around $150k. With unbelievably low interest rates, a very risk averse population in regards to investment and generally stable salaries, many Japanese families are quite comfortable. You only need to see the armies of people shopping on any given day to realize that a sales tax increase makes sense. The thing that surprises me the most is that the opposition parties oppose it. If Noda brings it in it will be his tax, at the end of the day.

0 ( +3 / -3 )

Haven't seen anything yet if tax hike is killed. Tighen your seat belt.

0 ( +0 / -0 )

Why don't they repeal the lower corporate tax rates that went in this year before they ask the people to suffer?

0 ( +2 / -2 )

Why don't they repeal the lower corporate tax rates that went in this year before they ask the people to suffer?

Because that is likely to make more people suffer with a higher jobless rate.

0 ( +2 / -2 )

even with the tax hike it will only generate around 13trillion yen /$160billion extra revenue for the governement, still only around $300 billion short to balance the budget, need to raise it too 30-40% to even get close to breaking even. man theres a lot of pain coming for the average Japanese, get your escape plans in place for when the pain becomes unbearable.

0 ( +0 / -0 )

Replaced with people that will say yes on the tax but no on everything else, just keep replacing people for every choice

0 ( +0 / -0 )

While many Japanese taxpayers are critisizing him, I have been supporting him since his first day in the office.. The truth of matter is that he INHERITED all these s**ts from LDP and Hatoyama and Kan. . He has a very difficult job to do: a tax hike. . How many J. politicians have you ever had who told you the truth? Probably none. Instead, many of them took an easy path to issue JGB without cutting public spending for the 5 decades. The sky has a limit. This needs to be done as well as public spending cut. The truth hurts. But you better do it now than later, I assure you. I pray for Japan.

0 ( +1 / -1 )

2020-It almost sounds like you believe that. The corporate tax breaks aren't going to create any jobs, just profits. This is tinkle down economics at it's worst ( there's a sponge at the bottom to suck up the excess urine).

0 ( +0 / -0 )

The corporate tax breaks

Are you talking about Corporate tax or sales tax? These two have a big difference. Japanese corporate tax is one of the highest in the world. If Japan wants to bring Japanese manufacturing back to Japan, that may need to lower that from what it is. However, Japan is caught between two hard rocks; sovereign debt over 200% and creating jobs for unemployed Japanese workers. This is a hard choice.

0 ( +0 / -0 )

Japan is now in a downwards spiral with few options. Growth is lower than spending increases. The income stream generated from selling little shiny things to foreigners has come to a halt as the world realises that Samsung sells them shinier and cheaper. However, the head-in-the-sand view is that Japan will magically rediscover its 80s growth and 90s market dominance.

With an ageing and declining population, Japan will be in slow motion decline for years. Eventually the savers who lend the government money will want the money back so that they can spend it. And then we will see that the cupboard is bare.

0 ( +0 / -0 )

How about an equivalent debate on cutting wasteful expenditure? The national government spends over 18% of its budget on so-called "local revenue grants", which are basically handouts to local governments to spend as they please. (Meanwhile, the locals get taxed twice to pay for the constant digging up of gas and water lines, with 13 men watching 3 men working.) But because this enormous amount of money gets spread out all over the country in countless wasteful projects, any misuse doesn't really get noticed or complained about. And anyone knows that there WILL be waste and corruption.

What's needed is the political will to force the central bureaucracy to force the local bureaucracies to account for and justify its spending, or lose funding. Change will absolutely not come about in Japan without a widespread determination to cut the head off the beast.

Such will seems lacking, and that bums me out.

0 ( +2 / -2 )

Life was so much easier when there was no such thing as "shohizé" in this country! It wasn(t that long ago! They started with 3%, then pushed it up to 5% and now that want to doule that...

-1 ( +0 / -1 )

Bugger the tax hike lets just keep kicking the can down the road and let the young whipper snappers in the up coming generations worry about it, lets spend up have a good time and careless. By the time we are gone europe will have recovered and they can pour money into Japan to keep it afloat much like what japan is doing to the europeans now.

Tax is what you use to keep the carpet down.

-2 ( +0 / -2 )

LOL! Look who's talking....! Foreigners...Guys how many of us can vote here..???Even though having a PR wont work...Talking, posting views won't make a difference anyway... Be practical and just watch! If there's a tax hike you gota pay same like the Japanese do! no complains and who do should go back to their country then - that's the japanese way. isn't it???

-4 ( +0 / -4 )

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