politics

Vice economy minister: More caution needed on next tax hike

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Fiscal stimulus to cover a tax hike. Absolute madness.

Like putting on both the brake and gas pedal at the same time.

8 ( +8 / -0 )

the government stands ready to roll out fresh fiscal stimulus to support the economy

i.e., more deficit spending to increase the debt burden on the economy.

The initial tax hike displayed a clear lack of caution. The LDP and PM Abe have no real grasp of how free market economies work, or how to make them thrive.

If the government wants to be cautious, it should bring the consumption tax down to the reasonable rate of 5%. Fixing the economy should be the priority. Tax hikes are counter-productive, and weaken an already anemic economy.

7 ( +7 / -0 )

More monetary easing? Right, pad the pockets of the already well-connected bankers to "help" the consumers by further devaluation of the money in their pockets and bank accounts.

The Gov needs to extract their collective craniums from their posteriors and not only cancel plans to again raise coconsumption tax, but also to rescind the previously raised taxes. Rolling back the taxes would boost consumer confidence. Also, they should stop devaluing the currency.

6 ( +6 / -0 )

They are already being cautious - they are releasing news articles like this, in preparation of the tax hike which they have already 100% decided will happen. They are just trying to break it to the public slowly. Anyone who doesn't think they have already decided is kidding themselves. This tax increase will go on, no matter what the public thinks.

5 ( +5 / -0 )

Somebody had better check their math.

If the Abe Government does, in fact, raise the tax rate from 5% to 10% - this is NOT a 5% increase - as stated in the article.

It is a ONE HUNDRED PERCENT increase.

Lawrence Klepinger

4 ( +4 / -0 )

Scrote, I don't think it's a matter of Abe having the "guts" to raise the tax; lowering it, or refusing to raise it, would take more guts. Instead, we're going to get higher taxes and more spending and more debt and higher consumer prices and more currency devaluation -- all things that chip away at Taro Q. Salaryman's quality of life but make the government and their cronies even richer.

3 ( +3 / -0 )

Despite accumulating a gradrillion yen's worth of debt and still having a slow economy, you'd think they'd have figured out that fiscal stimulus doesn't work, but as Einstein might suggest they are probably just insane.

After hearing about the record 100 trillion yen's worth of spending requests from the bureaucracy for next fiscal year it's evident that the government and bureaucracy is incompetent and has no clue about anything.

we will always respond with three arrows.”

Where is the third arrow? Aren't they supposed to announce some policies, implement some policies, and boost confidence?

The third arrow is just an enigma, a figment of everyone's imagination.

It's not hard. They don't even have to think about it. Just open an IMF report and pick some pro-growth policies, and get it done. Abe should just need to snap his fingers, shouldn't he? Who is leading this country?

2 ( +2 / -0 )

Reagan got it to work when he handed a trillion bucks to the Pentagon, the world's biggest single government insitution, so that government people could buy government equipment for other government people and to pay government issued wages to government employees.

Actually, since the 1970's, the Department of Health and Human Services (otherwise known as the "Welfare Department") has been America's largest (by dollars spent) government institution. Back in 1980', the Cold War was in full swing, the Soviet Union had invaded Afghanistan, and was cracking down hard on Eastern Europe. Reagan thought the time to be a "make or break" moment, and he didn't hesitate. He pushed the Soviet Union into economic collapse.

It wasn't Reagan's spending which got America's economy going again, it was a large program of deregulation, and tax decreases. These were done simultaneously by Margaret Thatcher in the UK, which compounded the global effect.

1 ( +2 / -1 )

Ie. "We need to wait until an LDP majority is secured to admit we really don't care what the people think or say".

It's going to happen whether we like it or not, because despite the benefits major corporations and the 1% are seeing, most have not really seen any benefits, with the middle-class, or the majority of people in Japan, being harmed by it -- especially given the promise to increase household income has barely been followed through (and even then it seems voluntary by company).

In any case, we're already paying 10%. There are no vending machines or train tickets that went from 200 yen, say, to 2006 yen -- they went to 210 yen because the machines are not equipped to deal with 5 yen or 1 yen coins. Shops that previously charged 99 yen for something, tax included on the label (thanks to Koizumi), are now charging 99 yen for the same item, with no tax yet applied, which means an ADDITIONAL 8% percent, not 3%. Admittedly, some shops have lowered the cost of products to make it so that the added percent is really only 3% (ex. changing the price to 95 yen instead of 99, then adding 8%), but many have not. These are but a couple of examples of how we are already paying more than a 3% hike.

1 ( +1 / -0 )

Abe hasn't got the guts to raise the consumption tax again; all we can expect is ever more spending and ever more debt, just like every other LDP government.

0 ( +2 / -2 )

Klepinger, Nishimura did in fact use the correct phrase, which is "percentage points", not "percent'. (In Japanese this is ポイント rather than パーセント.) Plenty of other reporters get this wrong, as do politicians looking to hide the impact of their tax hikes, but this time the Vice Economy Minister was not mistaken. His organization's policies, on the other hand...

0 ( +0 / -0 )

Yeah, and by "big" I mean size. DHSS has about 75,000 employees. the US military at least 1.4 million. For every 100 military guys, there's only 5 DHSS employees.

Back then the US military had many more people, yet DOD spending was still lower than DHSS. Millions at the time were "on the dole." Right now in America more than 100,000,000 are on some form of public assistance (welfare).

The Soviet Union's colllapse was economic, their primary expenditure was military defense. The cause of their heavy military spending was to answer any military threat from America. The math is simple.

0 ( +1 / -1 )

"The cause of their heavy military spending was to answer any military threat from America."

Even if that's true, they didn't respond to Reagon's massive spending, since the Soviet defence budget was unchanged throughout his presidency.

The truth is Gorbachev's economic and social reforms -- that took on a life of their own -- were the reason for the Soviet collapse. Reagon's $500 toilet seats had nothing to do with it,

0 ( +0 / -0 )

"....you'd think they'd have figured out that fiscal stimulus doesn't work"

LOL. It WAS working....before April 1, 2014.

Reagan got it to work when he handed a trillion bucks to the Pentagon, the world's biggest single government insitution, so that government people could buy government equipment for other government people and to pay government issued wages to government employees.

And he massively ran up the deficit to do this! But hey, the economy and markets grew. Where would Boeing be today without all that government financial support?

-2 ( +2 / -4 )

"Reagan...pushed the Soviet Union into economic collapse."

Utter nonsense. Gorbachev has a laugh whenever he hears that one.

The Soviet' defense spending never changed response to American military spending. CIA estimates from the 90s indicate that Soviet expenditures on defense remained more or less constant throughout the 1980s. Neither the military buildup under Jimmy Carter and Reagan had any real impact on gross spending levels in the USSR.

"Since the 1970's, the Department of Health and Human Services (otherwise known as the "Welfare Department") has been America's largest (by dollars spent) government institution."

Yeah, and by "big" I mean size. DHSS has about 75,000 employees. the US military at least 1.4 million. For every 100 military guys, there's only 5 DHSS employees.

-2 ( +1 / -3 )

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