politics

BOJ policy should be set comprehensively, not just for yen: Kishida

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Staying the course is probably the best direction for now. No point hiking with such modest inflation and an economic recover that is well behind that of the US.

-13 ( +2 / -15 )

"it also has a major impact on the burden of interest payments by the gov... cough cough... small- and medium-sized enterprises"

Devaluation of yen is socialization of the government and corporate debt.

8 ( +12 / -4 )

Reiwa Shinsengumi's leader, Taro Yamamoto, said the tax should be scrapped,

Hold it to a referendum: How many Japanese voters support scrapping the consumption tax, particularly on food items?

Versus how many voters would prefer the government prioritize changing Article 9 and subsidizing oil wholesalers and other corporations?

It won't happen because Japan is a one party LDP oligarchy that makes the "rules".

11 ( +17 / -6 )

Instead of making proclamations based on the desire to stay in power? How about having the people decide some major issues?

Taxing food or not would surely be a major one…

9 ( +11 / -2 )

In an online debate of party leaders held ahead of the July 10

The debate was held among nine party heads as Japan's regular parliamentary session ended Wednesday

I'm sure that childish and incoherent debated led to nothing, as usual.

Hey guys, stop bickering and start being productive already!

> Ichiro Matsui, leader of the Japan Innovation Party

I wonder if he knows Babe Mantel.

1 ( +5 / -4 )

Unfortunately SDF development into regular army will be sponsored by hiking consumption tax to 12% and decreasing the amount of pension for elders.

Yen will devaluate to 200+ levels while inflation will eventually hit 10-15% here in Japan.

Poverty and crime will begin.

Sell your yen until you still can.

-2 ( +6 / -8 )

To suggest Japan's economic woes can be solved either by raising or decreasing interest rates or VAT is - as ever in modern Japan - a case of everyone concerned collectively ignoring the elephant(s) in the room. You can't grow an economy that's shrinking and aging at this rate.

Regarding monetary policy the LDP might accurately be renamed the 'Quantitative Easing Party' at this point. It's really the only thing they've had to offer for 2 decades. If this were Germany or Britain there'd be protests. In Japan, it's a case of see no evil, hear no evil, speak no evil.

4 ( +9 / -5 )

Hold it to a referendum: How many Japanese voters support scrapping the consumption tax, particularly on food items?

Versus how many voters would prefer the government prioritize changing Article 9 and subsidizing oil wholesalers and other corporations?

A careful reading of the Federalist Papers will explain why based on considerable historical reference governing through referendum, in other words direct democracy, almost in every case leads to failure.

-1 ( +3 / -4 )

You can't grow an economy that's shrinking and aging at this rate.

Maybe, maybe not. It is a real problem for the economics community to solve. Increased productivity per worker can theoretically increase economic output even as the workforce shrinks. I think what is most important is per-capita GDP or per-capita income, in other words individual wealth.

0 ( +2 / -2 )

Mr. Kishida is correct. Monetary policy needs to take a wholistic approach to its effects on the economy as a whole. That is true of any nation's central bank, not just Japan. But Parliaments likewise need to tailor fiscal policy to address the needs of the time. Austerity in the face of a recession for example is a recipe for accelerating the decline in output and increase in unemployment and thus human misery. However when GDP growth resumes debts incurred during a recession need to be paid down.

-3 ( +2 / -5 )

@Desert Tortoise

"…direct democracy, almost in every case leads to failure."

While the present system is proving a resounding success?

6 ( +6 / -0 )

"It is a real problem for the economics community to solve."

Optimistic, considering the economics community hasn't been able to solve the problem for 30 years! I'd argue this is outside the scope of what economists can fix (name an example of economists successfully managing fertility rates for example). It's sociogical or cultural as much as anything. Japan is at a crossroads. Homogeneity and continued decline, on the one hand, or shaking things up with radical reform and maybe-just-maybe keeping the nose above the water. But this is the fundamental problem with the economists' magic trick of QE. It has acted like a painkiller up until this point and the body doesn't quite realise how serious the illness is.

3 ( +4 / -1 )

A careful reading of the Federalist Papers will explain why based on considerable historical reference governing through referendum, in other words direct democracy, almost in every case leads to failure.

The Federalist Paper arguments that led to the US Constitution and representative democracy created issues with messy compromises on slavery, etc., that had tragic consequences.

Japan's US-based Constitution has led to the kleptocratic oligarchs of the LDP and their cronies.

Direct democracy in all cases could lead to disenfranchisement of minorities, but in this case could correct the regressive crony capitalism of the LDP and Japan Inc.

2 ( +5 / -3 )

The BOJ would let the government go evidently insolvent if it were to stop sapping up the tens of trillions of yen deficits the government keeps racking up, letting interest rates to rise naturally.

There is no free lunch here though; the collateral damage is to the value of the yen in which half of the assets of the Japanese populace are held.

-1 ( +0 / -1 )

Taxing food or not would surely be a major one…

In the major scheme of things, that’s just fidgeting with tax policy, I think.

The government has accumulated more than a quadrillion yen of debt, and they are trying to spend even MORE money at faster rates than ever, while tax revenues - even at record levels - are 40 trillion yen short of the 105+ trillion the government wants to spend.

Sure we could ask the people what should be done with consumption tax on food, consumption tax on this or that… but if we do that, shouldn’t we also ask the people what to do about the massive ongoing deficits, not the mention the accumulated debt?

Cutting consumption tax on some politically favored item at this point is just a diversion from the truly major issue.

0 ( +0 / -0 )

I know, I know, USA and the so-called experts all want interest rates hiked.

Japan isn't doing it and instead is subsidising oil to keep the price low.

Interesting:

https://www.cbc.ca/news/business/inflation-economy-cheap-oil-1.6492634

Seems others are also questioning the "interest rates hike solution" system.

Lower oil and we lower everything else.

Sorry folks as the linked article points out we are not yet at the point we can drop oil and the riots in SriLankan are a good example of what we can expect.

Japan may get out of this mess better off than the rest as long as it ignores the western tried and true failure system of rate hikes,

Watch how people start defaulting on their loans and mortgages in the USA, etc...as interest payments get to high for them.

-2 ( +0 / -2 )

Watch how people start defaulting on their loans and mortgages in the USA, etc...as interest payments get to high for them.

What would you do when inflation is at 8 % with the start of a wage price spiral. Inflation creates a lot of pain for the consumer (especially the poorest one) , saver, the pensioners…etc). Yes people with a mortgage benefit but the policy is too much biased in their favor. It should be more balanced between the interest of the different economic agents.

-1 ( +0 / -1 )

Rakuraku

Today 06:27 pm JST

Watch how people start defaulting on their loans and mortgages in the USA, etc...as interest payments get to high for them.

> What would you do when inflation is at 8 % with the start of a wage price spiral. Inflation creates a lot of pain for the consumer (especially the poorest one) , saver, the pensioners…etc). Yes people with a mortgage benefit but the policy is too much biased in their favor. It should be more balanced between the interest of the different economic agents.

Oops did you forget those higher mortgages end up as higher rents for those "poorest" that's right the owners like everyone and everything else pass on the extra expense, what do you thing the building/apartment owners are going to do, just swallow the increase?

So inflation goes up groceries, fuel, etc..up add to that already mess higher loans, mortgages and rents, the poor are really going to have it good, right?

The rich are rich high rates high prices change little for them,

If you read the article I linked you will realize that the raise interest rates failed in the long run every time and ends up hurting those least capable of dealing with high prices.

Lower oil prices and everything else follows.

-1 ( +0 / -1 )

While the present system is proving a resounding success?

Japan has the world's third largest economy. That is no small achievement. With roughly the same population and far more natural resources Russia only manages to place number 13 among the world's economies. Outside of the bitter little echo chamber you inhabit Japan is seen as a wealthy and successful nation with a standard of living and individual longevity that are the envy of much of the world.

1 ( +1 / -0 )

Watch how people start defaulting on their loans and mortgages in the USA, etc...as interest payments get to high for them.

Not if you have a fixed rate mortgage. Most are. You do not see adjustable rate mortgages today like you did two decades ago. The defaults happen if property values decline to the point that property values are below the outstanding loan balance.

0 ( +1 / -1 )

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