According to Bloomberg News, that's what Noda said on January 14 after reshuffling his increasingly unpopular cabinet.
Mr. Noda, it is Europe and the rest of the world trying their best to avoid being like Japan, after having heeded the lessons of Japan, the one and only country in the whole world whose deficit to GDP ratio well exceeds 200%.
Noda's lessons learned from Europe? Raise taxes.
From Bloomberg (1/15/2012):
Prime Minister Yoshihiko Noda said containing Japan’s public debt load, the world’s largest, is critical after Standard & Poor’s downgraded credit ratings on France, Austria and seven other European nations.
Europe’s fiscal situation “isn’t a house burning on the other side of the river,” Noda said on TV Tokyo Holdings Corp.’s program on Jan. 14. “We must have a great sense of crisis.”
Noda reshuffled his cabinet last week, aiming to win support for doubling Japan’s 5 percent national sales tax by 2015 to trim the soaring debt. S&P said in November Noda’s administration hadn’t made progress in tackling the public debt burden, an indication the credit-rating company may be preparing to lower the nation’s sovereign grade.
Japan’s government, which has enjoyed borrowing costs that are around 1 percent, wouldn’t be able to manage its finances if bond yields surged to 3 percent, Noda said last week. The country risks seeing a spike in government bond yields unless it controls a debt load set to approach 230 percent of gross domestic product in 2013, the Organization for Economic Cooperation and Development said on Nov. 28.
(The article continues.)
If the bond yields increase 200 basis points to 3%, Japan's debt servicing would consume all of the government tax revenue, according to Kyle Bass.
Bloomberg's article has IMF suggestion to Noda, which he may be very happy to oblige - raising sales tax to 15%. That should totally finish off the struggling Japanese, because it won't be accompanied by the reduction in income tax:
The International Monetary Fund has said a gradual increase of Japan’s sales tax to 15 percent “could provide roughly half of the fiscal adjustment needed to put the public-debt ratio on a downward path.”
PM Noda and his gang are very eager to do the bidding of the international community at the expense of the citizens of Japan. That much has been known to many in Japan since he took office last September.
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8 comments:
Why, oh why, don't any of these Japanese politicians ever come up with a new idea for fixing the debt problem? Here's a novel solution: How about CUTTING GOVERNMENT SPENDING!!!
I know these clowns are mathematically impaired but this is ridiculous!
They've been the model Keynesians for decades. They will go down with Keynesianism. They probably never heard of Ludwig von Mises, and Ron Paul is a fringe candidate to them.
Use all the money donated to rebuild Japan while evacuating those in risk. The game is over. This is the only way I see Japan escaping the future demise. The Japanese if allowed will rebound if the truth is told and people are allowed to relocate. If not, you are looking at a country dying. Taxing people will just further the exodus in the coming years.
Decon is worthless!
What is never mentioned is that raising consumption tax is regressive shifting even more of the tax burden onto the poor. Why not raise income taxes, corporate profit taxes, and capital gains taxes?
Isn't the IMF a big proponent of taxing the people heavily and selling off their country's resources to the highest bidder? That's sure to 'work'... very poor people make good, obedient slaves! The benefits will go to the wealthiest who hold J-gov debt, the yen will be devalued, and the people will be forced to pay to live in their own country. The people will say that in times like these, they have to eat their souls to fill their stomachs.
Government spending is only increased when it benefits the highest layer of the government, not the people who pay the taxes. For the latter, it's always the cuts since the 1970s.
The much-lauded Ron Paul would not allow free health care even for radiation-affected children. I would vote for the god-damned Democrats as soon as I would vote for him.
Yes, Virginia, there are people who wouldn't touch any of the two parties or that "independent candidate" with a twenty-mile stick.
"The much-lauded Ron Paul would not allow free health care even for radiation-affected children."
I guess you didn't read the post here about free health care for Fukushima children? The purpose is not to treat them out of goodness of heart and care for them. It is the bait to keep them in contaminated areas so the headcount in Fukushima doesn't decrease any further. National government subsidies depend on the headcount, and the politicians, whose families have been long evacuated outside Fukushima, can continue to yield power and distribute money to their friends (construction industry, ag co-op, large landowners, etc.).
I wouldn't think Ron Paul would do such an inhumane thing to children in Fukushima.
I guess Japan is so fed up with itself. They can not even look at other countries and mimic what really works. Do they have to be totally pummeled into the ground and admit their backwardness before they will start to improve things? Jeez.
Why not start with reducing taxes, declare a tax exempt area in Tohoku for all capital investments for next 10 years ? This way risk capital can come int and sort out the total lack of capital, thereby provide seed capital for bank lending.
The earthquake affected areas are 'negative capital' areas; without infrastructure, with burdensome cleanup and health cost associated with it. No tax derived largess bestowed upon the area will help capital formation. Also any market ignorant investments do not stand any chance for returns.
The only way to heal is to induce investments.
Private capital will move much more quickly and efficiently rather than having to wait for Nagata-cho budgeting by pencil pushers.
If Earthquake Nuclear and Tsunami affected areas are taxed the same rate as rest of Japan, who in the hell will go invest there?
It is useless to rely upon Bureaucrats who never invested in any commercial risk bearing activity to understand this logic; they simply think if they take from where there is and they spend it, things will be hunky dory. And if the money isn't there, why borrow it.
Heck, with this kinda logic, why won't all companies leave Japan and go to Special Economic Zones (SEZ) popping up all over Burma, India, Vietnam and China and soon to be North Korea?
Japan will be Game over if we leave it to these bunch of politicians.
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