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Japan OKs ¥13.2 tril extra budget for FY2023 to fight inflation

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Of the total, 8.88 trillion yen will be secured by issuing new government bonds, adding to a pile of state debt already amounting to more than twice the size of the economy.

When did “fighting inflation” by flooding the market with more money become a good idea?

9 ( +12 / -3 )

When did “fighting inflation” by flooding the market with more money become a good idea?

Japan just have bizarre idea to fight fire with gasoline.

-5 ( +11 / -16 )

Government spending like this tends to raise inflation, while fighting inflation normally involves cutting back on fiscal spending. Econ 101, folks.

This package is political, not economic.

5 ( +7 / -2 )

printing money (13.20 trillion yen ) increases inflation, not the opposite.

if you want to fight inflation, reduce taxes and set a fixed price for energy and basic food.

-1 ( +5 / -6 )

Japan is on the way to become the most indebted country in the world in term of debt to GDP ratio after Venezuela… (currently number 2).

Until now Japan managed to muddle through because it was paying 0% interest on its debt but these times are over as it now has to pay 1% on its 10 years debt.

There is not a single case in economic history where a country could escape such a debt spiral without great hardship for its citizens.

-3 ( +1 / -4 )

it now has to pay 1% on its 10 years debt.

Who does it pay that money to?

-1 ( +1 / -2 )

JeffLeeToday  09:14 am JST

it now has to pay 1% on its 10 years debt.

Who does it pay that money to?

0( +0 / -0 )

Half to the BOJ but the other half to domestic investors (insurance companies, post…) and 5% to foreign investors. Of course you could have the BOJ buying the whole stock of debt and all new issues but I am not sure it will end up well. Or at least I do not know of an ex in economic history of a country that fully monetized its debt with a happy ending.

1 ( +2 / -1 )

Japan policy makers commit to further fuel for the fire.

-3 ( +1 / -4 )

The government will spend 1.33 trillion yen to support small and midsize companies implementing pay hikes,

So, unhealthy companies that might otherwise not be able to implement pay hikes shall be subsidized. Recipe for success?

3.44 trillion yen to foster growth in strategic sectors through investments, such as in artificial intelligence and semiconductors.

So AI and tech investors get subsidies, paid for by the rest of us. Recipe for success?

How about Japan final get with the program of the 1980’s, and implement some neoliberal free market reforms, and cut out the wasteful government spending of other people’s money…. which has run out

1 ( +3 / -2 )

Who does it pay that money to?

A lot of it to the same BOJ which… is printing all the yen that has a good deal to do with the inflation, that the government wants to claim to be fighting.

The media has completed overlooked the fact that the inflation was intentional on the part of the government and BOJ. They explicitly said they would seek price instability with their 2% inflation target.

Foreigners haven’t overlooked it nor have a lot of Japanese people.

Terrible policy, terrible results.

3 ( +5 / -2 )

Of the total, 8.88 trillion yen will be secured by issuing new government bonds, adding to a pile of state debt already amounting to more than twice the size of the economy.

A debt that will keep increasing and never paid back. As a normal citizen, the banks would chase me to get that money.

Anyway, in the same time, the age of retirement will be increased to 65, encouraging people to work until 70-75 or longer, claiming the pension system is unhealthy and can not give much. Well, why not issuing bonds ?

0 ( +0 / -0 )

now you understand why Kishida is buying missiles and making WAR simulations.

when the economy is bad, an excuse is needed....

The history repeats itself.

-3 ( +3 / -6 )

The supplementary budget brings total spending for fiscal 2023 to a massive 127.58 trillion yen

As already stated, flooding the market with cash is not the way to fight inflation.

2 ( +3 / -1 )

Well, inflation is still very low compared to many countries. If you’re having money issues cut back on a luxury or two or maybe work harder, get an extra job to raise your income.

-8 ( +0 / -8 )

About the only thing I can praise Fumio Kishida for is making the Japanese yen lower and lower.

-2 ( +0 / -2 )

@Rakuraku

Yep, most to the BOJ, a public sector institution, which eventually remits the coupon and principal back to the MOF while the bonds ("the debt") eventually roll off and disappear after 10 years. Oh, the tragedy!

You also missed all the government agencies and funds, like our pensions and other social security, which are now better funded thanks to the higher returns. As for the private sector, individual investors saving for retirement and kids' education, insurance companies that provide us with accident coverage, and private pension schemes for our enhanced retirement.

As for the foreigners, they get yen cash, which can only be used in Japan. So that money eventually comes back to Japan where it is saved invested or spent in our economy. The point is, the money goes round, much of it to us. It doesn't disappear apart from the taxed portions.

 Of course you could have the BOJ buying the whole stock of debt.... 

Which it isn't doing, so... huh? Whenever I bring up the facts, reality and logic, the debt hawks always try to counter by drifting off into some non-existing fantasy, as if to make some kind of counter-point. Weird.

-1 ( +0 / -1 )

The point is, the money goes round, much of it to us. It doesn't disappear

What consolation is that?

The money went round in the Weimar Republic too.

So, what went wrong there…

our pensions and other social security, which are now better funded thanks to the higher returns.

yikes, what about the inflation…

-1 ( +0 / -1 )

Inflation is closer to 30% here . Japan does NOT include the price of food and fuels in their GDP.!. If they did , the public at large would see how bad they’ve been getting hosed for decades.!.

0 ( +0 / -0 )

This tax reduction scam gives employers far too long to figure out how to skim wages, bonuses, and /or tiny pay raises …. Just give the people the money….

0 ( +0 / -0 )

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