Japan Budget:

Article Source:

 https://mainichi.jp/english/articles/20221219/p2g/00m/0bu/023000c

Article:

TOKYO (Kyodo) -- Japan's state budget for the next fiscal year from April will likely hit another record of around 114 trillion yen ($834 billion) as defense spending is set to rise to its largest-ever level and social security costs continue to swell, sources familiar with the plan said Monday.

The country's general-account budget is expected to top 100 trillion yen for the fifth straight year and hit a record for the 11th straight year, underscoring the difficulty heavily indebted Japan faces in restoring its fiscal health. The initial budget for fiscal 2022 was 107.60 trillion yen.

Ideas:

It's no secret that Japan has the largest debt to GDP ratio in the world at something like 250 percent of debt to GDP.

At the moment, Japan maybe can get away with so much debt but Greece in 2010, couldn't because the debt they had at the time was owned by other countries while Japan's debt is mostly owned by Japan.

But that doesn't excuse or help the situation as someday there could be major challenges to the pension system and other factors.

IN 2014 and 2019 the Japanese government increased the sales tax as a way to try and bring down the debt but it mostly hasn't helped as Japan just kept spending being a government spending government.

Article:

Japanese Prime Minister Fumio Kishida is seeking to boost defense spending to a combined 43 trillion yen over the next five years, after his Cabinet approved Friday new defense and security documents aimed at bolstering the country's defense capabilities to tackle growing threats from China and North Korea.

The annual budget is also expected to rise as the government plans to allocate around 4.6 trillion yen as a pool of funds that can be used for defense over several years, the sources said.

Ideas:

In these times, it seems logical that Japan is going to increase in defense but maybe in response to China increasing its defense budget. Of course government spending, while maybe excessive in Japan can actually increase the overall economy as defense spending can involve many sectors in the economy.

As China and North Korea continue to expand their defense budget perhaps Japan too feels it needs to increase its budget to give the appearance of not looking weak in how much it spends on its defense budget.

But with each budget increase is more government spending and more being added to th debt to GDP ratio each year.

Article:

The fiscal 2023 defense budget is expected to climb to around 6.8 trillion yen, from 5.4 trillion yen allocated for the current year. The figures include costs related to the realignment of U.S. forces in Japan.

Social security costs and debt-servicing costs make up about half of the country's budget. The Cabinet is expected to approve a draft budget for the next fiscal year on Friday.

Ideas:

Whether good or bad, the US continues to provide needed security to Japan and most likely will continue to provide whatever is needed.

With potential threats from North Korea and China the US is not going to change is present posture but at the same time, Japan wants to looks stronger with a stronger defense system, regardless of help from the US.

With regards to social security costs, as an ageing society most likely social security cost are going to increase even more in the future.

The same can be said of South Korea as both Japan and South Korea are the two fastest ageing countries in the world at the moment.

Most likely countries need to find innovative solutions so that they don't become another Greece which in 2010 had to decrease it pension coverage to lower its debt challenges at that time.

Have a nice day and be safe!