Positive Affects?

http://asia.nikkei.com/Japan-Update/Most-Japanese-voters-see-no-effect-from-Abenomics

According to the article, a small percentage of those polled in a survey have not felt any benefits from Abenomics. This is not surprising news as it seems, for whatever reason, the Japanese consumer, these days, tend to be somewhat pessimistic of their economy. Why not? When the economy is continually in a roller coaster mode, consumers and companies tend to take a wait and see and or always cautious mood instead of being optimistic which might result in negative results later.

Perhaps, unfortunately, Japanese companies and consumer have now internalized a pessimistic mood about the economy, never really expecting to see much in the way of improvement or growth. However, this might not be what is needed for the economy to get out of its long time roller coaster trend of up a little, down a little, up a little, down a little, never gaining any real momentum or acceleration in growth.

One strategy that might be needed is, however small, is to promote or advertise anything that might be positive in the economy. There always seems to be negative news surrounding the Japanese economy, but usually very little in the way of what sectors might actually be growing, what companies, large or small that might actually be investing, growing, expanding.

If companies and consumers can actually begin to see any areas where growth is actually happening, it might help other companies to see that there is life in the economy. Too much news focuses on the negative and not enough on anything that might be positive.

As has been suggested before in many news articles, the Japanese government should provide incentives for companies to invest and increase wages. Lower tax rates for companies that increase wages over a specific time period and or lower tax rates for specific kinds of investments.

Also instead of tax hikes, possibly the government should provide lower tax benefits for consumer spending. More spending at the current tax rate might be better than increasing the tax rate on consumers who are weary of any tax increases. What is lost in the tax breaks is more than made up in increased consumer spending if the incentives are big enough. This might help to stimulate the economy some and provide some needed positive benefits.

The same with company tax breaks. What is initially lost can be gained by more investments and more wage increases in the long run.

Also as part of the incentives for SME's provide low cost loans, more money in the economy, as has been mentioned before, as another strategy for growth.

Getting companies and consumers to see the benefits of increased spending is needed as long as they have incentives to do so. New strategies are needed by the ABE government besides bond buying and relying on exports to increase economic growth.


© 2015 Tom Metts,  all rights reserved