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Gov't unveils inflation-relief package

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For a decade the Japanese LDP-led government has been openly stating their desire for sustained inflation.

The entire time, nobody in the public questioned the logic of this..

Be careful what you wish for.

13 ( +17 / -4 )

So it's a one off ¥50,000 for those on welfare and no other measures at all? Not really a "package" is it?

11 ( +17 / -6 )

Blame it on the sunshine ( Russian war) Blame it on moonlight ( foreigners manipulations) Blame it on the boggy…( LDP) This greeting card is not a package it’s another LDP slight of hand, honestly at their average age never going to work! So frustrating to watch such bumbling stupidity again and again.

2 ( +12 / -10 )

How is 50,000yen going to help these people. They have no financial savvy, it will be spent in less than a month and then they will be back to square one.

Wages need to rise inline with inflation and something needs to be done to stop the yen skydive.

13 ( +17 / -4 )

For a decade the Japanese LDP-led government has been openly stating their desire for sustained inflation.

We're getting the wrong kind of inflation. The hoped-for kind is demand-pull, not cost push, as is the case now. Also, the BOJ believes that current inflation is temporary, not "sustained."

And it's not so much about LDP aspirations, as the BOJ's. That's the one with the long-held pro-inflation policies and is largely responsible (on the domestic front) for the current situation.

7 ( +9 / -2 )

I realize everyone needs money and this Government is doing everything wrong and keeping people poor. The people who need this lousy ¥50000 [A one time shot!] are not low-income citizens in that if the Japanese Government did their jobs correctly, there would be no need to give them the cash in the first place. Blame the citizens for being poor is a cowards way to look good themselves. In my mind, all these politicians should take a hard long look at themselves in the mirror and ask themselves: What will Karma do to me?

9 ( +10 / -1 )

Open the borders by years end and I'll be there spending massive amounts of YEN!

3 ( +7 / -4 )

This will do absolutely nothing as it relates to Inflation. Japan is the only industrialized country in the world that does NOT include the price of food and fuel in their GDP. Neither is an inflationary factor here . The 50,000¥ for the less privileged will do nothing … if these are truly poor people, give them an additional 50,000¥ per month for a set amount of time. Subsidies for big oil ? Just more corporate welfare. The gas companies are not holding down the price of fuel .

6 ( +12 / -6 )

'@TokyoJoe

"How is 50,000yen going to help these people. They have no financial savvy, it will be spent in less than a month and then they will be back to square one."

The whole idea of the new relief package is get low-income people to spend the money and stimulate the economy.

-4 ( +3 / -7 )

So, raise interest rates to 2% to support the yen. Then, track U.S.A interest rates. Oh, and start generating your own electricity via wind, solar, H.E.P. pump storage, tidal, and even nuclear.

5 ( +6 / -1 )

Tachi nomis and pachinko parlors will be having a field day!

-8 ( +2 / -10 )

So nothing for the average Taro and Keiko who are slaving away and managing to survive on the ever stagnant wages that get them over the threshold to pay residential taxes. Just the decades old, one trick pony idea of a one off handout ( no doubt distributed in a 1950,s analogue way ) and big subsidy handouts to the corporates.

Useless LDP, but then again why should they give a toss , the election just happened and by the time new one rolls around the minions will dully re-elect these same inept fossils again. Beyond help.

-4 ( +6 / -10 )

The government will spend around 900 billion yen to give 50,000 yen each to low-income households exempt from paying resident taxes.

What Kishida doesn't tell you is that the "protecting livelihoods" part is a very low priority compared to things like this: "the government will maintain its subsidies to oil wholesalers beyond September until the end of this year."

And that the cut off for residence tax exemption is absurdly high. A previous article stated a 40-50 hour a week full time job with a take home pay of 150-160,000 yen a month. Still subject to these taxes.

50,000 barely covering a month of taxes will give the bureaucracy a lot of work taking from one and giving with another.

Utter Kafkaesque farce.

-4 ( +2 / -6 )

Poor people do not pay income taxes.

1 ( +3 / -2 )

and a relentless drop in the yen.

Which this initiative does nothing to address and will just make inflation worse. Treatment of a symptom and not the cause, the J governments go to option every time.

-3 ( +3 / -6 )

50 000yen for tax exempt low income families.

While the rest of us gets nothing just higher food prices.

-3 ( +2 / -5 )

Food prices are really going up...and not just by a bit.

Salary is stagnant .

CUT THE CONSUMPTION TAX !! DO SOMETHING!!! NOW!!

3 ( +4 / -1 )

Good news for English teachers then hopefully. Teachers are paid a pittance.

4 ( +4 / -0 )

Japan is the only industrialized country in the world that does NOT include the price of food and fuel in their GDP. Neither is an inflationary factor here .

I think you are confusing how inflation and GDP are calculated. The sales of food and fuel, in fact the value of all goods and services are incorporated into every nation's GDP. GDP is the sum of consumption, investment, government spending and net exports, written GDP = C + I + G + ( EX - IM ). This is called the Equation of National Income and is true for all nations.

Food and fuel prices rise and fall cyclically. Food prices are lowest in the summer as freshly harvested crops enter the market in abundance, driving prices down, and highest at the end of winter when fresh food is more scarce. This is true in most nations. Fuel prices are likewise affected by seasonal variations, and are usually highest in the winter when there is a demand for heating that competes with other uses of energy. For that reason when economists and other economic actors calculate a nation's core inflation rate they usually exclude food and fuel. Incorporating them skews the data and hides the basic underlying trends. Does that make sense? There is nothing sinister about this. Excluding food and fuel price changes allows economists to see what is really going on in a nation's economy.

-1 ( +0 / -1 )

Poor people do not pay income taxes.

Perhaps, but they pay sales taxes that are proportionally a greater share of their income than it is for higher income groups, and they pay property taxes indirectly through their rent. They also pay various utility taxes with their utility bill.

4 ( +5 / -1 )

Food stamps not cash.

reduce consumption tax.

finish sanctions on Russia and trade as intelligent adults.

-6 ( +3 / -9 )

I understand the intent of what the government is trying to do but the economist in me cannot help but to think that adding more money into an inflationary economy will only drive further inflation. Admittedly the amount of money involved is small relative to the Japanese economy but still, it is counter intuitive.

0 ( +2 / -2 )

Desert Tortoise

Today 10:27 am JST

I understand the intent of what the government is trying to do but the economist in me cannot help but to think that adding more money into an inflationary economy will only drive further inflation. Admittedly the amount of money involved is small relative to the Japanese economy but still, it is counter intuitive

Here is where reality and economist often clash with politics and special interest groups.

The top economists at the 3 largest Canadian banks completely disageed with what the economists in government with raising interest rates, so does Japan.

They suggested that the best and fastest way to lower inflation was to lower oil prices.

But that wasn't what the powers wanted.

Higher interest rates hurts Regular people high fuel hurts regular people.

But that is what they have in America Canada and Europe.

At least here we aren't dealing with it as badly as they are.

-6 ( +0 / -6 )

and yet here in Okinawa the car lines go out in the highway from Starbucks,,,,

-1 ( +0 / -1 )

They suggested that the best and fastest way to lower inflation was to lower oil prices.

Circular logic. Did these august economists offer a way to lower prices?

Higher interest rates hurts Regular people

"Regular people" have been complaining for the past 14 years that low interest rates on savings accounts, typically less than 1% per annum, and even on certificates of deposit were too low and made it not worth their time to save.

But that is what they have in America Canada and Europe.

That completely ignores the exogenous sources of inflation. America, Canada and Europe cannot order China to end lockdowns or open closed ports, the key sources of the supply chain disruptions that are driving inflation globally. It also ignores national policies to curb foreign travel during the pandemic that limited the supply of foreign labor for agriculture and for global maritime shipping. I would argue the sources of the current inflation are outside the direct control of any nation. There are no short term cures. Long term governments can add infrastructure to eliminate supply chain bottlenecks and companies can move production out of China and perhaps closer to their customers to hopefully minimize the effects of future supply chain disruptions but this inflation is not in my humble opinion amenable to the usual fiscal and monetary policies used when inflation is caused by too much money chasing too few goods. That is now what we have today. We have supply chain disruption driven shortages.

0 ( +1 / -1 )

What is worrying is that until recently companies in Japan were not increasing their prices because other companies were not doing it.

But now that inflation started both due to economic policy mistakes and external factors, companies are no more concerned because everybody else is increasing prices. As there is a tendency in Japan to do like the other are doing it will be very difficult to stop this trend. Food price increase is now between 10% to 15%. Now that the floodgates are opened there is no more limit.

At the same time the economy will be hurt as consumption will fall due to high prices without salary increases. Welcome to stagnation which is the worst economic situation possible.

4 ( +4 / -0 )

How is 50,000yen going to help these people. They have no financial savvy

Oh boy, privilege alert.

4 ( +4 / -0 )

The whole idea of the new relief package is get low-income people to spend the money and stimulate the economy.

which is how we got this high inflation in the first place

finish sanctions on Russia and trade as intelligent adults

tell Putin to get his troops out of Ukraine & we’ll talk about it. But an intelligent adult putin ain’t.

1 ( +1 / -0 )

Not even 50,000¥ per person but per household if I read well ?

0 ( +0 / -0 )

Yeah i noticed the size /portions have become less but the prices are either the same or mostly higher.

Has anyone else noticed the portions got smaller and the prices rised ?

0 ( +0 / -0 )

They will probably most of them use the 500 cash handout to pay utilities.

0 ( +0 / -0 )

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