Japan and record $490 billion stimulus package: Debt and right target?
Sawako Utsumi and Sawako Uchida
Modern Tokyo Times
Prime Minister Fumio Kishida of Japan announced a record $490 billion (55.7 trillion yen) stimulus package. Hence, this economic policy is aimed at assisting the weak economy, helping smaller companies that are struggling with debts, families with children, and other important areas. However, despite the size of the stimulus package, many areas remain baffling.
The coronavirus (Covid-19) crisis is playing havoc with the global economy. Thus Japan is seeking a way out of the crisis by implementing new coronavirus policies while assisting the economy during this difficult period.
However, it is unclear why families with children are being targeted with favorable cash handouts.
After all, the working poor, workers faced with decreasing wages (hours cut, travel perks reduced, bonuses cut or limited, and other negatives), female workers with lower salaries, and so forth should have been targetted with cash handouts. Similarly, for workers who have been laid off, why not support them to the same extent?
Reuters reports, “The size of spending was much bigger than the 30-40 trillion yen estimated by markets, and will be mostly funded by an extra budget of around 32 trillion yen to be compiled this year. The remainder will likely be funded by next year’s budget.”
Japan’s debt is enormous. However, it appears that the ruling Liberal Democratic Party (LDP) isn’t concerned about this.
Kishida said, “We’ll mobilize all available tools to fund the package, including issuing deficit-covering bonds.”
Kishida continued, “The package has more than enough content and scale to deliver a sense of security and hope to the people.”
However, it is debatable if the working poor, workers who have lost a lot of earnings concerning the coronavirus crisis, the unemployed, and other people struggling will fully agree with the prime minister.
NHK reports, “The stimulus includes measures to contain a surge in retail prices of gasoline and other oil products in light of high crude oil prices.”
Associated Press reports, “Japan has never had a full lockdown during the pandemic and infections remained relatively low, with deaths related to COVID-19 at about 18,000 people. But the world’s third largest economy was already stagnating before the pandemic hit.”
Lee Jay Walker says, “Japan’s public debt is estimated to be 13.2 trillion dollars (over 1.4 quadrillion yen). However, economic stimulus packages – often fixed on the stock market rather than people struggling in Japan – are never-ending under the LDP. At the same time, Japan continues to help nations all over the world and funds leading international institutions despite its dire internal debt.”
It is doubtful that the latest stimulus package will paper over the countless cracks that exist. Even if certain areas, like supporting companies that are struggling, are welcomed.
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