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The government has failed to learn lessons from the past by repeating policies with no freshness while accumulating debts.

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Yasunari Ueno, chief market economist at Mizuho Securities Co, criticizing the Japanese government's Y13.5 tril economic stimulus package. (Kyodo)

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You know what they say - you can't teach an old dog new tricks. Japan is one giant Old Boys' Club!

1 ( +3 / -2 )

Reason: Economic stimulus package, a temporary solution, seems to be the most viable option in hand considering the fixed tenure of every administration. So to think of a better, productive long term, permanent solution that would really help to rebuild the economy, Japan needs to think different.

Solution: Extend the tenure of present administration to a longer duration and make them accountable to come up with a different solution to the problem (i.e. non economic stimulus package approach). The purpose is to enforce the authorities to think in a direction of solutions proposed by various researchers and economists over the years.

Since this problem is very very serious the tenure of the government should be extended so that some real good ideas surface. Dont expect any good solution as long as the administration is in survival mode itself.

0 ( +0 / -0 )

Such a "massive" stimulus yet negative reaction from financial market. Only Abenomics experts can explain why?

1 ( +2 / -1 )

True. JGB market is even reacting badly now.

2 ( +2 / -0 )

If there was no economic crisis, then politicians would not be able to loot the treasury and taxpayers to fight the crisis. In the past it took major wars to generate this kind of spending, debt, and graft. Economic recessions, depression, and collapses are windfalls to politicians and their friends, who use them as carte blanche to expand their power and ability to spend.

The real solution to the problem is the most obvious one: cut spending. Cutting public sector spending and taxes would give the private sector the money they need to create businesses, hire workers, and increase salaries. But one becomes a politician to spend other people's money, not to save it.

0 ( +3 / -3 )

@sangetsu03: I beg to defer with your solution. Cutting spending is just not going to solve this problem. In fact this in itself is the problem here in Japan. The very purpose of injecting the paper money into the system via economic stimulus package is to encourage spending across the chain i.e. from business to consumers. This would "theoretically" stimulate the economy.

However whats happening "in fact" is that the spending is just degrading(or shrinking) inspite of the stimulus package. Thats because masses are insecure about their future financial situation and are inturn saving, investing the money. This is in addtion to the cost cutting and cut in spending which is already happening.

1 ( +1 / -0 )

Borrowing from the future to please today's voting-majority oyajis' pension fund, truly nothing new.

0 ( +0 / -0 )

@sangetsu03: I beg to defer with your solution. Cutting spending is just not going to solve this problem. In fact this in itself is the problem here in Japan. The very purpose of injecting the paper money into the system via economic stimulus package is to encourage spending across the chain i.e. from business to consumers. This would "theoretically" stimulate the economy.

Your post is not logical. Rather than borrow money from the taxpayers to give to the taxpayers to stimulate economic activity, would it not be more sensible to spend and tax less? If that were done, money would not have to be pumped into the system to stimulate growth, because the money would already be there. But if the politicians are able to dole out the taxpayers' money, they can divert this money wherever they like, and most of the country will never see a yen of it.

The money the government supposedly spends on "stimulus" does not in any way support growth. The money is distributed by the central bank, and from there it goes to the large commercial banks, all of which are owned by Japan Inc. These banks "lend" the money to their manufacturing and other divisions. Japan's 17 stimulus programs of the last 21 years have amounted only to life support for Japan Inc. And so far not a single one of these programs has succeeded.

What is happening is that Japan Inc controls the government, and the government's pocketbook, and have used the government to keep their companies alive for the past couple of decades. If you look at the boards of many of Japan's largest companies, you will find that they are populated by former politicians and bureaucrats, and family members of the the same. There is no line between the large business interests and the government in Japan, one hand washes the other, using our soap and water.

0 ( +2 / -2 )

People here have a lot of trust in the government maybe. I remember when Hatoyama talked about reining in the sphere of bureaucrats. He was such a bumbler and perhaps they undercut him anyway, but there was talk back then of all the wasteful perks of being civil servant. Hashimoto failed in his campaign (leaving aside what devils there were in the details). I don't know what will turn people against the government, especially if they are easily convinced that having less and less opportunity is shoganai. Many of my students say they want to work for the government as that is seen as one of the best bets, aside from a big car company or something. Maybe these decision-makers will be dead by the time the poop hits the fan. But, even if they're still here, they will find a way to blame the young for their lack of spirit and the young will just take it - exhaustedly.

2 ( +2 / -0 )

"Rather than borrow money from the taxpayers to give to the taxpayers to stimulate economic activity,..."

Nope. Govt spending results largely in a transfer of money from the govt to the private sector. that is why the govt is running a big deficit and corporations are in a big surplus overall. For every deficit there must be an equivalent surplus, and one side's spending is another side's income.

Your advice essentially is to take money and income away from private businesses and hand it back to the govt. Is that really what you want? LOL.

"money would not have to be pumped into the system "

The money comes from asset purchases. The private institutions give up their assets in exchange for liquidity and their bottom line is the same as before. That's a swap, not a "pump."

-2 ( +0 / -2 )

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