Japan Economy Compensation:

 Article Source: https://mainichi.jp/english/articles/20221021/p2g/00m/0na/078000c

Article:

TOKYO (Kyodo) -- Japan is considering spending just over 20 trillion yen ($133 billion) on a new economic package aimed at helping households cope with accelerating inflation and rejuvenating the pandemic-hit tourism sector, sources familiar with the plan said Friday.

The country's demand remains weak even as the economy has emerged out of the initial COVID-19 fallout, and the slightly north of 20 trillion yen in government spending, to be finalized this month, is designed to boost it.

The Cabinet of Prime Minister Fumio Kishida is expected to make a formal decision next Friday so an extra budget to fund the package can be submitted to parliament, the sources said.

Ideas:

Even compensation plan is good but it needs to be significant and sustainable. Not just a one time addition but something like two or three times over several months for households and businesses.

The tourism sector probably can't be completely back to normal until the Chinese government decides what do do with is covid policy as a lot of tourism in 2019 actually came for China.

While it must be remembered that a government can't fix everything all at once and maybe they don't have the needed resources to fix everything, so they need to focus on what is most important or the most critical areas to fix or manage.

The economy might be weak not because was of the covid fallout but because of either overall weak demand and or very little wage increases which is probably the main cause if you add in the weak yen.

Article:

The total size of the package will likely be larger, given that spending by others, such as local governments, will be included. At issue is how the government will secure funds when the country's debt is more than twice the size of the economy.

The government plans to secure a few trillion yen from unused funds in the state budget for fiscal 2021 that ended in March and bigger-than-expected tax revenue, the sources said, adding that the rest will come from issuing government bonds.

Kishida, who has stressed the need for a "bold" package, is focusing on three areas -- steps to cope with inflation and the effect of a weaker yen, spurring wage growth, and rejuvenating growth through investment and reform.

Ideas:

Most of the Japanese debt is probably owned by Japan which means no external debt or outside factors calling in the debt etc. like in Greece in 2010. So Japan really doesn't need to worry too much except for maybe the credit ratings which might have some say about the debt.

But of course there is always the challenge of future Japanese generations and the pension programs and so on.

Every country seems to have its debt challenges which including the US. Every year there is a budget debate in the US congress about increasing the debt ceiling.

Wage growth, among the factors affecting the Japanese economy, seem to be the main challenge as companies seem to be resistant increasing wages for maybe some good reasons such as increases in energy costs, increased in raw material costs, and of course the compounding of the weak yen which increases the cost of everything.

Article:

Government spending could still increase in response to calls from the ruling Liberal Democratic Party. LDP policy chief Koichi Hagiuda has said the government should aim for an economic package worth 30 trillion yen to close the country's supply-demand gap of around 15 trillion yen on an annual basis.

Among inflation-relief measures, the government plans to reduce household utility bills, targeting electricity and city gas. Existing subsidies for oil wholesalers to lower gasoline and kerosene prices will be extended beyond December.

Russia's war against Ukraine has raised energy and food prices, while the yen's tumble to its lowest level in decades has exacerbated the pain for resource-scarce Japan by inflating import costs.

Ideas:

Again a 30 trillion yen economic package might not be enough. It might be enough for the time being or in the short-term but there needs to be several packages that can really help households and it needs to be sustainable.

As far as oil wholesalers are concerned it needs to continuous as energy prices continue to increase which means subsidies need to also keep up with inflation and the increase in energy prices.

Most likely the yen is not so much as Japanese government challenge but more of a Bank of Japan challenge. If the yen was in-line with the other economies such as the US dollar then maybe the yen wouldn't be quite so bad off.

But to be fair and honest inflation has hit every economy so the Bank of Japan is not so much to blame and inflation, even without the yen challenge most likely inflation would have increased in Japan, but maybe again not as much.

Article:

The rising cost of living crisis has come at one of the most challenging times for Kishida, who has seen his Cabinet's support ratings plunge over his decision to hold a state funeral for slain former Prime Minister Shinzo Abe, the country's longest-serving leader, who was powerful but divisive.

Public scrutiny of the government and the LDP has also intensified over dubious ties between party lawmakers and a controversial religious group.

Ideas:

Prime Minister Kishida seems to have many challenges ahead as he tries to gain support for his cabinet along with the long past state funeral situation and now the lingering controversial religious group situation. 

It remains a mystery just how did a South Korean religious group gain so much influence into Japanese government politics, not to mention the negative affect's it has on regular society with its heavy influence on pressuring regular citizens to give large sums of donations against their will.

Have a nice day and be safe!

Updated on Dec. 15, 2022