Japan Inflation Budget: Updated Feb. 5, 2024.

 

Japan enacts $90 billion FY 2023 extra budget for inflation relief

Article Source: https://mainichi.jp/english/articles/20231129/p2g/00m/0na/037000c

Ideas:
While the new extra budget it good and needed, why did it take this long for the Japanese government to try needed help to Japanese households, when inflation has been continuing now for maybe three years.

Yes, a government can't do everything but something more than energy subsidies would have helped many households in Japan.

Of course maybe just maybe if the Bank of Japan had loosened its ultra policy rates maybe again there might have been a different effect on inflation in Japan.

But the Bank of Japan, for good or bad, has repeatedly said the Japanese economy is too weak for key interest rate increases. 

Again, in a market economy, the government can only do so much and despite what people think a government doesn't have unlimited money to use on every need in society.

Of course, unfortunately, politics intertwines with the governing of society and the government, and at times, leaders of government will do what is needed to make sure they have support from society.

A 40,000 tax cut is very good and needed, and again, a government can't do everything, But for the low income groups and the fixed income groups, is it enough. For the upper income groups they probably don't need it but many do in Japan. 

To be fair, many Prime Minsters have consistently had low ratings as it seems the Japanese public is never happy, with its leaders, like everywhere else in the world.

Again, a government can only do so much, but also at the same time, there are those in society who think a government should do everything. Some in society think the government has unlimited funds, money, to do things, and at times it seems like that with the way governments spend. 

The Bank of Japan, and the Japanese government seem to be relying on large companies to get the Japanese economy and society out of its inflation challenges. But the challenge is 70 percent of Japanese workers don't work for large companies but small and midsize companies, which in April of 2023, didn't give wage increases, or most of them didn't.

The opposition bloc has also suggested maybe reducing the sales tax at 10% now to less as a way to help Japanese society.

The Japanese economy and Japanese government, is probably the most heavily indebted economy in the world with debt to GDP running maybe 250% of GDP.  But most of the debt, if not all, is internal, and not owned by anyone outside of Japan as compared to Greece in 2010, which much of its debt was owned externally.

All governments say they will reduce spending, but most governments never reduce spending but instead continue to spend. Its like households, with good intentions to save and or reduce its extra spending, but most never do it due to emergencies and so on, and its the same with governments.

At the same time, there are going to be government situations that can come up that will be considered important, and as a result more spending will take place.

Again, politics always has a part of governing, and different parties within a government, have different ideas. It will be interesting to see just what happens by April 2024, regarding subsidies and gasoline taxes. 

If inflation doesn't decrease and or remains higher than what the Bank of Japan feels is good, the gasoline tax subsidies will probably remain.

Nuclear power plants, after the 2011 incident, lost favor with the Japanese public, but nuclear power is clean and not every expensive, compared to gas and oil. But it going to take some time, to convince the Japanese public on the positives of nuclear power after the 2011 situation.

Have a nice day and be safe!