politics

Japan's FY2021 budget to hit record high of over ¥102.66 tril

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Incredible numbers.

In fiscal 2020, tax revenue is expected to total about 55 trillion yen, the sources said, far short of the government's initial projection of 63.51 trillion yen due to poor corporate earnings.

Think about that.

Before there was coronavirus, they were spending 100 trillion yen a year, even despite tax revenues being just 63.5 trillion - when times were “good”.

Spending 36.5 trillion yen more than tax revenues, when times are GOOD. Not bad like they are this year, when most would be happy to look the other way and make up for it later.

But Japan is spending it all well above that, and there is no hope to make up for it all later, unless it is much, much, much later in another completely different era of history.

Apart from the pandemic-related factors, spending on social security in the coming fiscal year will increase by a few hundred billion yen from the current year as the population rapidly ages, according to the sources.

And nothing has been done to make this system fundamentally sustainable. At some point, it’s going to let people down because the can has been kicked down the road.

In recent years, the costs for pensions and other social welfare services have accounted for about a third of Japan's initial budget.

Or, “more than half of annual tax revenues”, or “completely financed by deficit spending”...

Does it make sense that so many are supposedly dependent upon the government in this way?

If financial conditions change at some point (...hmmm), then what for all this borrowed money equivalent to what is spent of social security?

What is going to give?

4 ( +5 / -1 )

....and who will pay for these numerous tax money wasting campaigns?

like tokyo olympics,unecessary shoping of us missiles,sponsoring of US army on japanese soil even decades after end of WW2,go to travel campaign and so on and so on...?endless list?

2 ( +3 / -1 )

@fxgai

"there is no hope to make up for it all later,"

There's lots of "hope." Nearly half the "debt" is being held by the Bank of Japan. Just let those bonds mature, at which point the "debt" disappears. Or just cancel the bonds.

0 ( +0 / -0 )

One "0" more or less, seems "they" don't really care.

The tax payers generations will have to pay in the end.

0 ( +1 / -1 )

Nearly half the "debt" is being held by the Bank of Japan. Just let those bonds mature, at which point the "debt" disappears.

At maturity the Ministry of Finance has to redeem the principal.

Or just cancel the bonds.

That would leave a big hole in the BOJ, the credibility of which backs the yen.

We can try this idea out, sure! Maybe it would all go unnoticed.

0 ( +0 / -0 )

heh, who wants some new Japanese government debt, the day after they cancel on the BOJ?

0 ( +0 / -0 )

The BoJ and MoF will just print money and cover it up until Japan is Zimbabwe, and people are pushing shopping trolleys full of banknotes to the supermarket... They will then suck their teeth and say "shikataganai".

2 ( +2 / -0 )

When taxes start to rise even more than now, then people will start to take notice...

0 ( +0 / -0 )

@fxgai

heh, who wants some new Japanese government debt, the day after they cancel on the BOJ

People and financial institutions who have lots of yen cash and need to park it somewhere. and the Boj, of course.

At maturity the Ministry of Finance has to redeem the principal.

To whom? Itself? In any case, it's a stroke on a keyboard and little else.

That would leave a big hole in the BOJ, the credibility of which backs the yen.

Every warning over the years about the BOJ's "credibiilty" has turned out to be fantasy. In the real world, the yen remains a major global safe haven.

0 ( +0 / -0 )

People and financial institutions who have lots of yen cash and need to park it somewhere. and the Boj, of course.

The day after the government debt is cancelled, you think people want to own some? Suit yourself, but I'd switch completely to foreign currency savings myself, if that happens, although I do believe it is merely an MMT fantasy.

To whom? Itself?

The MoF pays the owner of the bonds the money borrowed back at maturity, which in this scenario is the BoJ (although they have to figure out how to cancel on just the BoJ and not other bond holders too, or an even bigger ooops).

In any case, it's a stroke on a keyboard and little else.

and the coronavirus is a hoax too right.

That would leave a big hole in the BOJ, the credibility of which backs the yen.

Every warning over the years about the BOJ's "credibiilty" has turned out to be fantasy.

(Well, the story is far from over but) therefore you extrapolate that the MoF cancelling the debt owed to the BoJ would not be a problem of any sort?

May I have my "free lunch" please?!

0 ( +0 / -0 )

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