politics

Japan preparing Y5.4 trillion economic stimulus package

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Yeah, right! The stimulus will go to corporations only and Naoki Average will get bugger all!

6 ( +8 / -2 )

Good!

-4 ( +2 / -6 )

stimulate my bank account!

2 ( +4 / -2 )

Please don't spend on jets, missiles and aircraft carriers. There are old people who needs elderly homes, kids needing better eduations, Fukushima victims needing a steady place to live and work and young people needing training so they can get a better job.

9 ( +11 / -2 )

Instead of that stimulus package, how about this stimulus package:

Cut the consumption tax to the original 3%! Let people have more of their money to spend on what they want, and CUT GOVERNMENT SPENDING ALREADY!

4 ( +7 / -3 )

They have been preparing and implementing stimulus packages for decades now with limited economic success and with awful consequences for the countryside and life in general. Government spending is wasteful and poorly targetted. Leave the money in people's pockets and let their spending stimulate the economy in areas that they care about.

5 ( +6 / -1 )

"Effective package " - for the amakudari construction companies effective perhaps....the poor get a laughable 10 000yen one off bonus to "compensate" for the sales tax increase - that will last them for about a week if lucky and the rest of the taxpayers get zilch. Effective ?....could not think of a less effective word to describe it.

7 ( +8 / -1 )

Leave the money in people's pockets and let their spending stimulate the economy in areas that they care about.

But what would all those Diet members and bureaucrats do with themselves all day if they didn't have stimulus measures to draft and vote on?

1 ( +2 / -1 )

Japan preparing Y5.4 trillion economic stimulus package = Japan preparing Y5.4 trillion for construction contracts for their pals in the industry.

6 ( +7 / -1 )

If the stimulus package is to offset the tax increase then why do they raise the taxes in the first place? If the taxes are not raised then people may continue to spend. Giving the large corporations and governments incentives to spend only helps a small percentage of the population while the sales tax affects everyone. Maybe I'm just too simple minded.

5 ( +6 / -1 )

Getting deeper into debt Tao they become too big to go down sounds like a song by Status Quo Down Down deeper ....

2 ( +2 / -0 )

Japan preparing Y5.4 trillion economic stimulus package = Japan preparing Y5.4 trillion for construction contracts for their pals in the industry.

Exactly correct!

4 ( +5 / -1 )

I have a more efficient way of saving/making money: Half the lower house member count! 480 members whereof what? 2 are women and I can bet my butt, 250 people are utterly useless. That would save us from a lot of dumb ideas plus the added benefit of not having to pay tax funded salaries to a lot of old- thinking men.

As for the tax raise, I welcome that, if we got something for our money. I wouldn't mind paying even up to some 10% if I thought it went to what's good for the country.

Apart from that, it should be ovious that what worked 40 years ago won't work any longer. That ship has sailed and the J-pols are dumbstruck on how to deal with that. Thankfully, they are blessed with the what must be the most ignorant and passive voter base in tye developed world so they can do what they please...

Good luck, Japan. Last person turn out the lights, ne.

1 ( +4 / -3 )

And on this news the Nikkei dropped over 2%. The cash in your hand/bank just got devalued that much more.

0 ( +3 / -3 )

Thanks very much. That sounds good. Just leave it inside the front door. I'd be happy to go out, stay at hotels, and do all I can to stimulate the economy. Don't worry... I'll take care of it.

1 ( +1 / -0 )

It's not your money to spend. It's probably not even mine, it's probably my kids or grand kids. Why don't you start paying of the debt, or at least let me spend my wage on my family, not some dam in the middle of nowhere, or a pile of tetrapods to foul up the coastline.

1 ( +2 / -1 )

A Y5.4 trillion economic stimulus package to soften the blow of a 3% increase in consumption tax??

[Howls of laughter..!]

Who is JGOV trying to kid?

When my home country introduced a 12.5% sales tax (that's 0 to 12.5% tax overnight) there was no 'stimulus package' and -amazing - everyone woke up next morning and no one died.

1 ( +1 / -0 )

"And on this news the Nikkei dropped over 2%"

After gaining about 80% over the past year. LOL.

"It's not your money to spend. It's probably not even mine, it's probably my kids or grand kids."

Wrong. Every single yen in the economy came from one source: the government. The money is created by the govt by crediting various accounts. Why would you think it belongs to your kids?

0 ( +2 / -2 )

Is there a site or source that accounts for where and how all this money is spent? The Japanese economy is smoking hot

-1 ( +0 / -1 )

Wrong. Every single yen in the economy came from one source: the government.

From a treatise on "the definition of money".

"Of all the false ideas current on the subject of money, none is more harmful than the notion that the government has a monopoly on the issue of money. If banks could not issue money, they could not carry on their business. And when the government puts obstacles in the way of the issue of certain forms of money, one of the results is to force the public to use perhaps less convenient forms.

As can be clearly proven by careful study of history, a dollar or a pound or any other monetary unit is not a fixed thing of known size and weight, and of ascertained value, nor did government money always hold the preeminent position which it today enjoys in most countries.

The notion that the government coin is the one and only dollar, and that all other forms of money are promises to pay that dollar, is no longer tenable in the face of the clear historical evidence to the contrary. A government dollar is a "promise to pay,” a "promise to redeem,” just as all other money is. All forms of money are identical in nature, namely a credit for the holder and a debt of the issuer."

-1 ( +2 / -3 )

Yay....more traffic lights!.../sarcasm

2 ( +2 / -0 )

" After gaining about 80% over the past year. LOL."

It's nothing more than a sugar high. The crash will hurt all the more. The markets and fairy dust supporters are locked in a vicious cycle. Take your profit when you can because the high won't last.

2 ( +4 / -2 )

Well said Jeff. Serrano - Unless Consumption tax goes up they won't even be able to start paying the debt off. After reading many of your posts, you clearly have little of idea of simple economics.

0 ( +1 / -1 )

Unless Consumption tax goes up they won't even be able to start paying the debt off.

The consumption tax was expected to raise 5 trillion yen in the short term, subtract the 5.4 trillion "stimulus" package, the effect is a net loss of 400 billion yen. But then this has been the routine for the last several decades, raise taxes a little, raise spending a lot, and continue to recklessly accumulate debt.

In the long term, the increase in the consumption tax will at best be revenue-neutral, and at worse, actually decrease revenue by reducing economic activity.

The most obvious solution, reducing government spending, is still not even being considered.

0 ( +2 / -2 )

@Sangetsu

Nice try. That article was published in 1914, in the an when precious metal coins were viewed as the only "true money." Last time I checked, my 100 yen coins were made of a cheap alloy...no surprise since precious metals now play zero role in the monetary system. Your comment is completely, utterly irrelevant.

"It's nothing more than a sugar high."

Of course it is, just like the surge in machinery orders and projections for increased capital spending.

1 ( +1 / -0 )

theResident: "Serrano - Unless Consumption tax goes up they won't even be able to start paying the debt off. After reading many of your posts, you clearly have little of idea of simple economics."

sangetsu03: "The consumption tax was expected to raise 5 trillion yen in the short term, subtract the 5.4 trillion "stimulus" package, the effect is a net loss of 400 billion yen. But then this has been the routine for the last several decades, raise taxes a little, raise spending a lot, and continue to recklessly accumulate debt."

I dunno Resident, I think maybe sangetsu03 is right and you are wrong.

-1 ( +2 / -3 )

Just give every member of the government 1000,000 yen a month and be done with it, they need money to pay for the deprravity that they need.

2 ( +2 / -0 )

Nice try. That article was published in 1914, in the an when precious metal coins were viewed as the only "true money." Last time I checked, my 100 yen coins were made of a cheap alloy...no surprise since precious metals now play zero role in the monetary system. Your comment is completely, utterly irrelevant.

Not so, money is two things, a means of storing wealth, and a medium of exchanging wealth. The government does not set the value of money, people do. And the assets of a nation are not based on the amount of coins and banknotes a country has, it is based on real goods such as real estate, buildings, industrial and agricultural production, eyt. The amount of money a government can issue is limited by the amount of assets the country possesses. If the government issues too much money, then it loses value, but the real assets do not depreciate in value, just the currency.

One doesn't necessarily need to exchange money for goods. I have traded real estate for other real estate, cars for cars, and labor for food and housing. Banks exchange assets such as stocks, securities, real estate, etc. Money simply facilitates the exchange of wealth which is tied to the value of assets or labor.

-1 ( +1 / -2 )

Of course, the increased sales tax is to help pay off the world's largest national debt - largest by nearly double the next country. There are all the fat cats living the high life on the profits they made during the bubble with cupboards full of cash and they are the ones that will receive the stimulus. Meanwhile, this generation gets to pay more tax so the previous generation can enjoy the riches they scammed off the backs of scab laborers. It's a bloody farce! They should be increasing corporate taxes and cutting taxes for Naoki Average and smaller companies to share the wealth. But instead, the rich will get richer and the poor will get poorer. If Abenomics are allowed to run full circle there will be no middle class in Japan. It will be us and them - just like it was 300 years ago!

1 ( +3 / -2 )

It won't even pay off the debt as all of this increased fat spending is coming up...to stimulate the economy because of the slowdown due to ... the sales tax going up!

1 ( +1 / -0 )

Japan will steal from the people in taxes and bolster the economy by giving tax dollars to those who qualify to be recipients of tax dollars. This means those who give to right political party. Where does the government get the money to spend 4 trillion yen? it comes from the taxes they take. Who sees that money? The large corporations and the yakuza under the guise of construction. The people only see tax dollars taken and spent. Government always takes from the poor and gives to rich. Warning this post may be removed by the government run media.

1 ( +2 / -1 )

@Serrano +1

-2 ( +0 / -2 )

" the surge in machinery orders" only looks like a surge in terms of devalued yen. The actual number or items is flat.

2 ( +2 / -0 )

Japan’s piled-on stimulus package should not be treated as a bad thing entirely even though it looks a bit radical.

Here are some good things: First of all, the whole economy package totaled around $182 billion will not ask Japanese Gov. to sell additional debts. Secondly it would further spur investment spreading in both public sectors and private ones; as a result, it sustains Japanese economy growth momentum. Last but not least, Nikkei index would be fueled for new high. This year alone Japanese stocks rise about 50% contrast with 25% of S&P.

However, this stimulus package also comes with a couple of caveats which may ,in turn, cast shadows. A. the impacts of the new sales tax are unknown, it could go both ways. B. the supposed structure reform has yet accompanied by, that might make future stimulus package backfired down on the road. C. It further weakens yen and makes importing goods more expensive, especially the fossil fuels, therefore, triggers inflation that would put some strains on ordinary people's lives.

Anyhow, I am cautiously optimistic on this new package at this point.

2 ( +2 / -0 )

The target for abenomics is not increasing export, but to increase domestic spending. Earlier QE resulted in weak yen, which increased export AND also import, resulted in deficit. Without increased domestic spending, the whole thing will fail. Thus, by introducing sales tax increase, NISA for tax-free investment account, TPP talk about easing protectionism, they hope to persuade the public to start using their savings to spend on big purchases, investment products, etc. It's short sightest, after the tax increased, things will start deflating again, so that's why there's another increase to 10% to generate a second wave of "spending". What happens after ? Only time will tell.

2 ( +3 / -1 )

"If the government issues too much money, then it loses value, but the real assets do not depreciate in value, just the currency."

Japan recently doubled its monetary base in one fell swoop...with no significant effect on the yen. Well, I've got current real-world evidence to support my argument. All you've got is a 1914 commentary a monetary system that no longer exists. LOL. Gee, I wonder who's right?

"Seriously, economics degrees from Canadian universities"

You're British? So who's running your central bank? Canada was one of the few developed countries to escape the 2008 meltdown. Canadians are geniuses when it comes to economics.

0 ( +0 / -0 )

"After dropping nearly more than 300% since the mid-1980's."

Moving the goal posts, bubba. We're talking recent business, not from the previous bubble era. Economics degrees from american universities should come with an Honesty Disclaimer. LOL.

The Canadian government, like any government, does stupid things economically speaking. You won't hear me defending their actions either.

The loose monetary policy and actions will come back to bite everyone in the rump.

0 ( +0 / -0 )

I can't help wondering how many of the details of how this money is "spent" will be withheld from public scrutiny as it falls under the new State Secrecy Act.

Never you mind where all that money went, citizen. Cough up and pay your taxes. We have debts to pay, and it's your patriotic duty to pay them for us. Excuse me, I have a banquet to attend.

1 ( +2 / -1 )

They should invest that money in their military sector as they're going to need it.

-1 ( +0 / -1 )

The US system is built on debt. We do not print our own money. Nihon could be out of debt tomorrow because it does print it's own money. But instead of doing that it's the give and take game. J.D. Rockefeller, J.P. Morgan, Paul Warburgs and Baron Rothschild are the founders of the Federal Reserve Bank and their families control it. They SELL the US their USD paper notes at 15 cents on the dollar. It's debt all round. Nihon on the other hand prints it's on money but wants debt all round.

1 ( +1 / -0 )

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