politics

Economic stimulus plans include Y450 bil for business support

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The government will set up schemes worth nearly 450 billion yen

Schemes is the key word.

2 ( +3 / -1 )

Abe has instructed the finance minister to disregard borrowing limits set by the previous government, and the draft document did not say how the how the package would be funded.

Husband: We're in big trouble, honey. We can't even afford to pay the interest on our credit cards any more, even if we spend 100% of our income. What should we do?

Wife: We'll be fine! I just signed up for a NEW credit card that has NO LIMIT!

Husband: Swell! I'm going to go buy a new set of golf clubs!

5 ( +5 / -0 )

Here we go.... Obamanomics in Japan. Simply crazy, alas no surprise.

-6 ( +2 / -8 )

I thought the high yen was the best possible incentive for J companies to buy up foreign ones, but i guess here comes Abe bearing pork. All good for takeovers overseas but heaven fobid if a foreign company was to take a substantial holding in a Japanese one...( eg. Hon Hai and Sharp ) , gotta fight it tooth and nail...

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Obamanomics in Japan? You have no idea what you are talking about. You certainly don't understand Obama's plan. Obama is for the people. Abe is backed by corporations and lobbyists. The people won't see a dime of this stimulus package.

Abe = Not a a government for the people. You want to buy something from America, okay here ya go. We'll sell you some of our debt. Good luck trying to collect.

450 million for corporations. I say shame on you. Japan hasn't even resolved the compensation it owes to all those dislocated from BIG Nuclear.

If you love your people and your country that 450 million should go back to the taxpayers. Guess we won't see companies held responsible for their misdoings any time soon.

Abe and Obama are completely different leaders. Don't even try to compare them. When Abe makes Time's Person of the Year or a Nobel Peace prize then you can talk.

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10 trillion yen, with half devoted to public works

Half to the Yakuza contruction companies

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@FPSRussia

Obama is for the people. Abe is backed by corporations and lobbyists.

I think this is an overstatement. Obama is also for the corporations and lobbyists, just to a lesser extent. Obama sees some need to regulate the harsher aspects of capitalism, such as growing income disparity, though he also seems to believe in corporate welfare. But both Obama and Abe believe in big corporations and big government.

Obviously we need to reign in all of these organizations, but some people just talk about reducing the size of government. That would just hand more power to the corporations. Yet the governments of Japan and the US now are so tight with huge corporations it doesn't seem to matter. The common guy or gal gets screwed no matter which way s(he) turns.

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Oh, gawd! The cronies have started filling their coffers already! Note: There is no mention of any kind of support for the middle and lower classes, just an increase in an already bulging public debt. Next, they will announce tax cuts for businesses and increased taxes for everybody else. The rich will get richer and the poor will get poorer. Meanwhile, the economy slips deeper into a full blown depression. These twits have no idea! I wonder if any of them actually studied political sciences and/or economics in university. Did they go to university at all?

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FRSRussia

" Obamanomics in Japan? You have no idea what you are talking about. You certainly don't understand Obama's plan. Obama is for the people. Abe is backed by corporations and lobbyists. The people won't see a dime of this stimulus package. "

"Stimulating" your way out of debt by making more debt is precisely Obamanomics. It is absurd policy in the US, and it is absurd policy in Japan.

That in the US, the ruling party likes to cover it with class warfare propaganda makes it no different. Taxpayers will have to to pay for government debt there as well as here.

Here, like there, it makes of course for tempting propaganda. Hey, no pain! We simply "stimulate" ourselves. And of course the corporate recipients of this government pork applaud it.

Nevertheless, it is vodooh economics. In the end, the debt bubble will have to pop.

-1 ( +1 / -2 )

mmmm steaming fresh cashola!!

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More concrete, please, especially in the rural regions. I heard that there's a 3-km stretch of river in Aomori where the banks haven't yet been concreted. Fix it up, and just watch the economy grow.

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@WilliB

Stimulus spending during periods of low growth has long been standard economic practice. Your "voodooh economics" is a term, ironically, used by George Bush Sr to describe "Reagonomics," and yes, that did create massive deficits...but while the economy was growing, which is not supposed to happen.

Reagon's trillion dollars on military spending was the mother of all stimulus...the government pouring money...into the government.

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gaijinfo, you pretty much sum it up. It put a smile on my face despite the tragedy of it all...

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WilliBJan. 08, 2013 - 11:15AM JST

FRSRussia

"Stimulating" your way out of debt by making more debt is precisely Obamanomics. It is absurd policy in the US, and it is absurd policy in Japan.

Seriously, you haven't got a clue. Abe has no intention of stimulating Japan out of debt by making more debt. As far as Abe is concerned the future generations of Japan will pay this debt. He is stimulating the economy, or to be more precise his economic pals, through more debt, he has no intention of repaying this debt during his premiership.

Do a little bit of research won't you? Abe's policy has nothing to do with Obama's policy, don't bring it up.

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Obviously no one is expecting Abe incl himself to be able to repay all debt during his premiership, knowing the amount to be roughly 17 x current annual tax revenue. At the same time however his intention is obviously not in simply increasing debt to please his closest of friends either. Believe the majority here have come to understand and accept this to perhaps be the only thinkable way out of the deflationary negative economic spiral and to bring back more optimism in terms of investor and consumer sentiment which will help hopefully result in bringing the debt and deficit amount down in the very long term. Abe is not stupid and he will be pressured to do all good to at least until LDP secures majority in the upper house election.

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how high does this ceiling go? seriously! I feel like we are being sucked into a huge black hole when this all collapses.

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No surprise Japan has the worst debt in developed nation, and Abe is going to make it a LOT worse in his (second) very short time in office. And no mention of putting it towards companies and works projects in Tohoku that have suffered and need reconstruction? Will the highways and tunnels all over there be repaired?

Methinks not, or at least not much of it. There's less profit into putting in money where things like that are needed when you could make a much bigger mint off expressways in, say, Okinawa.

No wonder the big companies all lobby behind this guy -- both them and government must just be rubbing their hands together and salivating.

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A plan to help businesses to buy foreign companies? They might as well send it to me. I'm in great need of a job and got a lot more of bright ideas to lighten up the economy. That for sure is my own economy.

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Without corporate modernization, injecting money in the J-economy will have the same effect as injecting water in the Fukushima NPP: maintaining critical situation for decades.

Maybe women should take over the country lead.

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"Stimulating" your way out of debt by making more debt is precisely Obamanomics. It is absurd policy in the US, and it is absurd policy in Japan.

WiiliB -- The discussion here is about Japan, so please take your sour grapes/FOX News sound-bites to an appropriate site. Than ou.

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alliswellinjapan:

" Believe the majority here have come to understand and accept this to perhaps be the only thinkable way out of the deflationary negative economic spiral and to bring back more optimism in terms of investor and consumer sentiment "

Absolutely not. It is true that other governments have bought into the same wrong logic that you present, but the reason is that it is easy for governments to dish out money, which they don´t have, while it is hard to cut down on government excess. Like others, Abe is chosing the easy way. He is now joining the race to the bottom, which will end by necessity with massive wealth destruction.

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Jefflee:

" Reagon's trillion dollars on military spending was the mother of all stimulus...the government pouring money...into the government. "

...and it worked to bring down the Soviet Union. It did not work, however, to create a sound economy, and it cannot.

Government is the worst possible allocator of wealth. This has proven true everywhere you look. Abe`s pork (which presumably will stimulate the construction and defense industries, at the expense of everyone else, is no different.

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Absolutely not. It is true that other governments have bought into the same wrong logic that you present, but the reason is that it is easy for governments to dish out money, which they don´t have, while it is hard to cut down on government excess. Like others, Abe is chosing the easy way. He is now joining the race to the bottom, which will end by necessity with massive wealth destruction.

Alliswellinjapan is absolutely correct. People seem to forget that Japan is in a deflationary spiral and less government spending mode is basically contributing this cycle. To put it simply, a cut in government spending means less revenues to the private companies that does these works which in turn equals wage decrease or even yet cutting staff which certainly won't contribute in no way shape or form, increased consumer spending.

Secondly, people again tend to not grasp the concept of "over 90% of Japanese yen denominated government debt is owned by Japanese". It's essentially a "debt" to the government but on the other side of the ledger, it's an "asset" for the Japanese people who owns these instruments. It's simply a net sum zero game on Japan's balance sheet with Japan still being the largest "net creditor" in the world for over 20 years.

Government is the worst possible allocator of wealth. This has proven true everywhere you look. Abe`s pork (which presumably will stimulate the construction and defense industries, at the expense of everyone else, is no different.

Who cares which type of industry gets the most benefit initially? If the construction companies gets more work, the materials that they use (lumber, concrete, steel companies) get more orders and equipment (heavy machinery, trucks) get more orders and the equipment parts that are needed to build those equipment get more orders which in turn requires more employees (actual construction workers, maintenance workers, and service workers). Hence, rather than place too much emphasis on the amount of debt government will incurr, more emphasis should be placed on increasing tax revenue through circulation of money.

I repeat. Japan is in a deflatationary spiral. A "kick in the butt" is sorely needed.

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Secondly, people again tend to not grasp the concept of "over 90% of Japanese yen denominated government debt is owned by Japanese". It's essentially a "debt" to the government but on the other side of the ledger, it's an "asset" for the Japanese people who owns these instruments. It's simply a net sum zero game on Japan's balance sheet with Japan still being the largest "net creditor" in the world for over 20 years

Not all Japanese or local residents are happy to bail out the co-operation failure of oversea diplomacy. Recently Japan wrote off many bad loans of corrupted and reformed Myanmar. Japan gave new development fund of many billions to Myanmar too. For local investors, it was really pointless. That will not get not much meaningful return. Only for politcal and strategic interest. Borrowing money to nation with bad credit history likes giving cash to drunken sailor.

Balance sheet will never get a net zero game if we concern about the defense. Defense spending is not profitable. It is only for national interest. Olympic is also another waste. It is only for national pride. Abe is a spoiled son of aristocraft. For him, money grows on tree. Not for others. Abenomic is worse than Reganomic.

Bailing out the failed co-operate likes Obamanomic. They will be spoiled and never accoutable for their incompetecy and misconduct. If the patient got a hopeless cancer, wise doctor will ampute the patient. Short term pain is acceptable for long term consequence like fiscal cliff. Failed co-opeate have to get out from business. It wll cause less burden to society and government. Government is not a baby sitter of co-operate.

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