politics

Japan enacts record Y97.71 tril budget for FY2018

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Holy Cow! $926 Billion... the U.S. Budget is $1.3 Trillion and they have a population of 325 million versus 125 million for Japan. In addition, the U.S. Budget spends heavily on the Military. Ohh my god, Japan's debt servicing costs roughly 1/4 of the total budget... and that is while interest rates are at... like zero. There is no way Japan is ever going to be able to raise interest rates. And finally... Japan will have to issue $300 Billion more in JGBs to cover the deficit. Japan needs to cut their deficit spending and start paying down its national debt.

4 ( +4 / -0 )

Has anybody else noticed that since Abe took office there has been a 'record budget' every year?

1 ( +3 / -2 )

the U.S. Budget is $1.3 Trillion

The 2018 US budget is $4.1 trillion, not 1.3

Japans budget is a normal amount for an economy it’s size, in fact should even be larger

1 ( +3 / -2 )

97 trillion of spending against 59 trillion of tax revenue, most of the deficit to be financed by the central bank ‘printing’ 33 trillion yen.

Long may the game of musical chairs continue.

Around 30 years ago government spending was around 60 trillion yen. The economy has expanded by nowhere near as much in the interim. How much has government spending as a share of GDP increased and what is there to show for it?

The economy is supposed to be in ‘good shape’ now, relative to say 10 years ago.

Yet still, tax revenues forecast at 30-odd trillion less than is to be spent.

You know what happens to tax revenues when the economy turns down. And you know that this government won’t stop spending money that it doesn’t have then, either, because even when times are ‘good’, this is what they do.

0 ( +2 / -2 )

@dcog9065.... ahhhh.... don't know where I read $1.3 trillion. That changes things. Now I feel a bit better about living in Japan. Had myself very worried.

0 ( +1 / -1 )

the U.S. Budget is $1.3 Trillion

That was just the recent splurge, not the total annual budget.

Japans budget is a normal amount for an economy it’s size

It is not normal relative to its tax revenues track record, which I would say is a more appropriate way to judge what is normal.

in fact should even be larger

The spending has been growing as a share of GDP for years, but I don’t see that the trajectory of the results of this spending is on the right track.

-2 ( +1 / -3 )

UK budget is about the same, around a trillion bucks. And the UK has nearly half the population. Japan is pretty frugal.

0 ( +2 / -2 )

Japan is pretty frugal.

A budget is not just the spending side. This is basic.

-2 ( +1 / -3 )

Central Bank effectively printing money and buying govt debt works while inflation is benign. In fact, a little inflation could help reduce total debt in real terms. It's all well and good as long as their main other lenders (Japanese companies, banks, pension fund and Mrs Watanabe) are happy with 0% interest and don't (ever) want their money back. The danger is if inflation takes off and interests rates with it the happy-go-lucky days of easy monetary policy will come to an abrupt end the govt will have to borrow from ...somewhere else at higher real interest rate, which of course they can't afford to do. And then God help them if Mrs Watanabe actually wants her money back. If real interest rates ever start to rise in Japan watch out (and quickly transfer every yen to your overseas bank) because basically they'll be bankrupt.

1 ( +2 / -1 )

How much of a tax money will go to buy American weapons which we don't need if we have the peaceful Constitution?

-1 ( +1 / -2 )

Crazy to be raising income taxes in this situation, when you need entrepreneurs to be creating jobs.

50% tax rates was the main reason I left Japan last year.

1 ( +2 / -1 )

RationalReaderToday 01:11 pm JST

Crazy to be raising income taxes in this situation, when you need entrepreneurs to be creating jobs.

50% tax rates was the main reason I left Japan last year.

Doing business in Japan is best done with your offices set up in other countries with more favorable tax systems. Just sayin. It is entirely possible to do business like this legally, but it requires careful structuring. You can do business without paying any tax at all and still be legal. Talk to a clever accountant versed in both Japanese and American accounting.

The LDP's strategy for the budget seems to be to get into things so deep that only they can pretend to have a plan to fix things in the future. Those of us who are under 35-40 years old are going to pay for this reckless fiscal policy in the future, our pensions will be confiscated and our taxes are going to be raised to the hilt.

1 ( +1 / -0 )

@geronimo2006

"the danger is if inflation takes off"

Not likely. Globalism, technology and demographics guarantee that inflation is not going to take off, even long into the future.

 

And then God help them if Mrs Watanabe actually wants her money back

What is she going to do? Go protest at the treasury? Investors buy JGBs because they're a safe place to park their yen, not because they're seeking any serious returns. Or if they're the BOJ.

 If real interest rates ever start to rise in Japan watch out

The authorites have proven they have complete control of rates, short and long term.

-1 ( +0 / -1 )

Not likely. Globalism, technology and demographics guarantee that

You started promisingly talking of likelihood but confused it by talking of guarantees...

inflation is not going to take off, even long into the future.

This is ‘likely’ true at a global level but even places that aren’t total basket cases are experiencing inflation for local reasons, often partly to do with bad policy.

The authorites have proven they have complete control of rates, short and long term.

They haven’t proved that they will be able to control rates for all eternity, or even a single rate cut / hike cycle...

Enjoy the ‘good’ times, while they last, like Fukushima daiichi electricity generation before 3/11!

-1 ( +0 / -1 )

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