politics

Gov't seeks quick boost for regional economies with Y3.5 tril stimulus package

31 Comments
By Tetsushi Kajimoto

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31 Comments
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You can stimulate the economy by letting me move to Japan and giving me a job in computer networking.

0 ( +2 / -2 )

Good luck, Brandon. May you get the chance!

0 ( +0 / -0 )

The measures sounds not very sustainable. Is it really that bad already?

5 ( +5 / -0 )

by next Christmas (?)

-1 ( +0 / -1 )

The stimulus will not require fresh debt issuance as the Finance Ministry will fund it with unspent money from previous budgets and tax revenues that have exceeded budget forecasts as the economy recovered, officials say.

Say................. what?

5 ( +6 / -1 )

I hope all you people wailing on about how Japan's fiscal debt will cause an economic meltdown and how it must be paid down now are paying attention to this story. LOL.

"the Finance Ministry will fund (the stimulus) with unspent money from previous budgets"

0 ( +1 / -1 )

I'm still waiting for my stimulus package.

1 ( +1 / -0 )

As the yen melts up? Wait till oil hits 100, painful.

1 ( +2 / -1 )

Abe is undoing all of Koizumi's reforms. Koizumi stopped all the city tax money being sent to the unproductive and wasteful countriside contry bumbkins. If the countryside has nothing to contribute, it should be allowed to die. Good Bye!

-1 ( +4 / -5 )

Weird economy to hike tax then give back to the unproductive firms and people. Somebody is screwing someone else. Abe is playing poker, but he likes it since not his money nor responsibility.

1 ( +2 / -1 )

It just baffles logic; Japan has the highest debt among developed nations, yet defend this new stimulus project by Abe because "hey, we're going to use a bunch of extra money we just have sitting around, so it's okay!" So, they could have used this instead of jacking up the debt, or more importantly, instead of creating more. Glad they have their priorities sorted out.

4 ( +8 / -4 )

It just baffles logic; Japan has the highest debt among developed nations, yet defend this new stimulus project by Abe because "hey, we're going to use a bunch of extra money we just have sitting around, so it's okay!" So, they could have used this instead of jacking up the debt, or more importantly, instead of creating more. Glad they have their priorities sorted out.

What is so difficult about the logic? Deflation is a more pressing long-term problem than the debt.

0 ( +2 / -2 )

Jan 2013 The LDP government anounced a spending package worth yen 10.3T ($116B) this was Abe san first major policy to end deflation and boost growth. The yen 3.5T Stimulus package announced today is taken or redirected from existing budgets some of which is ring fenced for what amounts to a low income regional social fund a fiscal slap on the back for LDP's core vote, merchandise vouchers and schemes.

Abe san also announced, a plan to 'slash the corporate tax rate to less than 30 percent over several years starting from fiscal 2015'. Also 'continue work to halve the primary budget deficit as a percentage of gross domestic product by fiscal 2015, compared to the fiscal 2010 level'. A Primary Budget 'Balance' deducts interest payments on debt.

Lots to take in, am I being disingenuous by pointing out a back draught of abracadabra, open sesame economics, without any concession or reference to tax revenue consolidation?. Lots of carrots here....Who is going to pay? Remember the 3.5T is from existing budgets. Could there be a tax increase coming?

2 ( +3 / -1 )

The package centers on subsidies and payouts to local governments to carry out steps to stimulate household consumption and support small firms, as Abe focuses on regional economies ahead of nationwide local elections planned in April.

Mama mia. If this is supposed to be the arrow No.3 than I am starring in awe.... NOT. Smells like he is buying votes by opening a few useless positions for inaka gov offices labeled "business promotion".

Eligible schemes could include distributing coupons to buy merchandise or fuel subsidies for low-income households. It will also seek to bolster the housing market by lowering the mortgage rates offered by a government home loan agency.

Coupons means something like foodstamps I guess? So, that is common practice in US and Europe nowadays. Sad, but the reality. I really hoped for addressing the problems of single mothers directly, as they carry a double burden of social stigma and poverty.

4 ( +4 / -0 )

Man this is depressing, this wont do squat, Japan seems hell bent on ignoring the core problems & just wracking up more debt.

Coupons.............WTF!

The stupidity continues with no real thought at all!

1 ( +1 / -0 )

With the one of the lowest spends on education to GDP in the OECD, all Abe's bunch can come up with is .....coupons?

Pathetic !

1 ( +1 / -0 )

I don't like it either, but note that if you net off the government's own assets, the national debt to GDP ratio is a little less than 100%. Remember the government still owns most of the stock for the trains, salt, post and numberless other "companies" that were set up in during Koizumi's rule. Japanese know this, so they are not worried. But it has been to Japan's advantage that foreigners think Japan is in terrible shape ("Don't bother me" syndrome). That is why Japan actually does not "implode" like everyone expects. Also, Japan is the world's largest lender (US is largest debtor).

0 ( +1 / -1 )

Abe, if you want to stimulate the economy, bring the consumption tax rate back down or get rid of it, bring back the 1000 yen rate for tolls for users of the ETC system for a start. I guarantee more people will shop, spend and travel around the country. Simple is best. Now, get to it.

1 ( +1 / -0 )

"The package centers on subsidies and payouts to local governments to carry out steps to stimulate household consumption and support small firms,"

Got a feeling that small firms and local government officials will see a lot more of this money than households. They tried these stupid "merchandise vouchers" about 15 years ago with most people buying things they didn't really need or want or not even using them. Why not just throw bank notes from the top of buildings around the country? It beggars belief that all the government can come up with is yet another wasteful, doomed-to-failure, shallow-thinking, quick fix approach.

4 ( +4 / -0 )

It hasn't worked for the past 20 years, but if Abe tries the same just one more time again maybe it might just work!

2 ( +2 / -0 )

The stimulus will not require fresh debt issuance as the Finance Ministry will fund it with unspent money from previous budgets and tax revenues that have exceeded budget forecasts as the economy recovered, officials say.

All Abe's arrows seem to require money to come out of thin air, either by printing it, issuing more deficit covering bonds or shaking the lose change out of the pockets and secret slush funds of the sleazeball-bureaucrats who amass it.

You have to wonder though if this is some fabricated concoction so that it appears it won't cost us a thing! If they had this so-called "unspent money", why hadn't this been used on previous financial crisis and why now? Why hasn't any more details been released as this surplus revenue and how large of a pool have they amassed. Something tells me we won't be given any information to these question because the money is being pulled from Tohoku aid money or some other less-priority programs like social welfare that rank at the bottom of Abe's wish list and would like to cut anyways.

3 ( +3 / -0 )

"I'm still waiting for my stimulus package"

I need one too, since prices have been going up but my income hasn't.

2 ( +2 / -0 )

All Abe's arrows seem to require money to come out of thin air, either by printing it, issuing more deficit covering bonds or shaking the lose change out of the pockets and secret slush funds of the sleazeball-bureaucrats who amass it.

What I would really like to know: Where are the 3 arrows are aiming at? What is the goal of the thin-air money bazooka ? All the power keywords like inflation, women in the workforce and structural reform are just means to some end, no? What is the vision behind all the action? "Beautiful Japan"? I have the feeling that there is missing something like a businessplan

Something tells me we won't be given any information to these question because the money is being pulled from Tohoku aid money or some other less-priority programs like social welfare that rank at the bottom of Abe's wish list and would like to cut anyways.

Exactly. If you cannot trust the gov to take care of basics like social security, how do you want bring people to take advanced risks like founding start ups or similar.I would like to see more discussion about social mobility as well. I think it is very much needed, otherwise nobody will do any effort as it is all "shoganai" and let's work at the konbini for all life.

2 ( +2 / -0 )

Default coming up? Like Iceland and Argentina?

-1 ( +1 / -2 )

It beggars belief that all the government can come up with is yet another wasteful, doomed-to-failure, shallow-thinking, quick fix approach.

I think it's about all they dare do when they have powerful, important backers who like things the way they are and can screw up their re-election prospects.

0 ( +1 / -1 )

Abe knows nothing but Keynesian voodoo economics. His supporters, including some self-deluded defenders here, are too near-sighted to see the much bigger picture and the coming collapse. It's high-living for some now, but the laws of gravity aren't changed, and soon enough this QE bubble is going to implode.

2 ( +5 / -3 )

I don't like to say I told you so but I did hint at this last week, now its been announced, after all the bleating here about no help for the poor or low income households, abe does this and those same bleaters are now bleating because he is giving this group help that the bleaters asked for.

Abe cannot win with the whingers, all they do is whinge and bleat.

Go Abe, do what you think needs to be done, just keep the yen around where its at , give out incentives for the locals to keep updating their cars so we have plenty of used ones to ship off shore, bringing back into the economy valuable off shore funds that would not normally be in this economy, ignore the doomsdayers, just keep priming the economy with more of the same.

Lots only complain but none of them on here have any ideas or suggestions on what he should be doing instead. At least abe is doing something as opposed to sitting on his hands like all the rest of the former PMs up to now did.,

-1 ( +2 / -3 )

"Abe knows nothing but Keynesian voodoo economics."

Raising everyone's taxes amid low demand and growth and for the sake of "fiscal consolidation" is the antithesis of Keynesian economics, just for your reference.

The use of the term "voodoo" economics is interesting. It refers to the supply side policies of Ronald Reagan, and the term was concocted by his own vice president. LOL. Now THAT was voodoo economics, committed by a deficit spender who preached the virtues of the "free market."

"and soon enough this QE bubble is going to implode."

If there's a bubble implosion, it'll be caused by reckless and greedy banks. Just like they always are: 2008, 1997, 1930s, 1991, etc.

2 ( +2 / -0 )

"Beautiful Japan"?

When he says "beautiful Japan", he has an image of pastoral countryside in Yamaguchi prefecture where he grew up .

-1 ( +0 / -1 )

Thanks for you comment, Tina. Then Abe's and your views are aligned very well, as you mentioned in another comment that I still remember very well:

tinawatanabeDEC. 20, 2014 - 11:10PM JST That's right. I rather Japan lives in the Stone Age with free shrine access.

-1 ( +0 / -1 )

tinawatanabe Dec. 27, 2014 - 03:35PM JST

When Abe says "beautiful Japan", he has an image of pastoral countryside in Yamaguchi prefecture where he grew up.

That's funny, I always thought it was an image of the Imperial Japanese army waving their Hinomaru into battle and claiming more territory in the name of the divine leader, the emperor!

-1 ( +1 / -2 )

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