Gov't enacts ¥2.7 tril extra budget to tackle rising prices

Nearly 1.2 trillion yen will be used to extend the current oil subsidy program through the end of September.

Subsidy is that new capitalism?

https://www.bloomberg.com/news/articles/2022-05-31/japan-panel-to-release-proposal-for-kishida-s-new-capitalism

Always nice that we can borrow in our kids names to enjoy ourselves

Subsidy is that new capitalism?

Meet the New Capitalism, same as the Old Capitalism.

Did anyone expect anything else from Kishida and the LDP other than enriching cronies and kickbacks?

Ridiculous. It's the central bank's job to fight inflation, not the govt's. Unfortunately, the BOJ has been busy with policies on women's career advancement and green energy promotion that it's forgotten its actual remit -- inflation and employment.

As karl van Wolfern wrote: Japan is like a play where all the main actors are miscast.

Ridiculous. It's the central bank's job to fight inflation, not the govt's. 

It is not ridiculous at all. t requires both. Central banks can only use monetary policy tools. Those are often insufficient. Central banks have no budget authority and thus are not in a position to wield fiscal tools. Only an elected representative body with budget authority can do that. Ideally the Diet and BOJ would coordinate their efforts.

Dont need an extra budget. Just remove the consumption tax off food and the extra tax added to fuel over the Iraq war. The fuel tax which had a limit expired some years ago but the Japanese goverment decided to add it on agaon even though the war had finished. I think it was something like 20 yen per litre on petrol.

I believe that taxing food which is an essential item for human life and survival is immoral.

@Desert Tortoise

Central banks have no budget authority and thus are not in a position to wield fiscal tools.

Of course not. That is not how the system is designed. Central banks are required to take the govt's fiscal actions as a given and then respond independently to any undesirable effects in the economy by using their unique set of policy tools.

So we get more in debt, and put the prices of everyday up by 12-15% for every single unprivileged citizen? I remember fondly when sales tax was 5%, now 10%. Next 15%???

Extremely stupid decision. If the government wants to help people, send the money directly to end consumers and let them decide what they need!

Or use the money to help ween the country off oil and gas with EV rebates or building electrification rebates.

The government should not be using our taxes to subsidize fossil fuels!

@Blue

the BOJ IS the government.

It is a public sector institution but its policies and policy tools are separate from those of the government. The government, for example, can't change the benchmark interest rates. The BOJ is supposed to be independent from the government, although politicians try to put pressure on it from time to time.

Extra budget means printing more money that will be added into the circulation that will eventually lead to hyperinflation and crash the yen. The US build back better requires trillions of dollars too that we already are seeing it’s effects on the value of the dollar. Your 100k dollars last year is now worth only 60k. That is how printing more money that you do not have will lead to the devaluation and destruction of currency. When all the economies of the world are destroyed, the Davos guys can usher in their digital currency as part of the objectives of the Great Reset and put the whole world under one world economy and one world government.

As I’m just a small minnow, all I can do is stock up on fish food while I can…

I believe that taxing food which is an essential item for human life and survival is immoral.

I believe that taxing income, which is essential to buy not only food but shelter and everything else, is equally immoral. As is taxing business, which is what gives many people paid employment in the first place.

Tax always has negative effects on that which is taxed.

But if we only tax specific things, there won’t be enough revenues (since politicians always want to spend more than are available, this is always true!)

In the first place, tax is needed to have revenues to be able to provide for those in need - few ever disagree with this. Since tax has negative effects, it is the least bad option to have low rate, broad-based taxes, and on things which people can’t easily evade. Consumption of food is something that everyone does and makes it a suitable source of taxation for stable revenues.

Never forget that those revenues ought be directed at the needy. Non needy people don’t mind paying a low rate of tax on their dinner for those ends, and same with all the other stuff, a little here and there.

put the prices of everyday up by 12-15% for every single unprivileged citizen?

Which residents are not privileged?

If we all agree to have less “privilege” (funded by other people, of course) then we certainly could enjoy lower taxes.

But unfortunately people are never putting their hand up to take away their own privilege, only the privilege of others. Hence, here we are.