2 posts tagged “japan”
This is absolutely remarkable footage! The satellite provides wonderfully clear footage as it approaches the surface! It's as close as most of us will ever come to one of our dreams. Fantastic.
As January 20 nears, Barack Obama's ambitions for spending on the likes of roads, bridges and jobless benefits keep growing. The latest leak puts the "stimulus" at $1 trillion over a couple of years, and the political class is embracing it as a miracle cure.
Not to spoil the party, but this is not a new idea. Keynesian "pump-priming" in a recession has often been tried, and as an economic stimulus it is overrated. The money that the government spends has to come from somewhere, which means from the private economy in higher taxes or borrowing. The public works are usually less productive than the foregone private investment.
There has been a country that has been here before: Japan during the 1990's.
In 1992, Japanese Prime Minister Kiichi Miyazawa faced falling property prices and a stock market that had sunk 60% in three years. Mr. Miyazawa's Liberal Democratic Party won re-election promising that Japan would spend its way to becoming a "lifestyle superpower." The country embarked on a great Keynesian experiment:
WSJ Asia editorial page editor Mary Kissel says massive "stimulus" plans didn't help Japan. (Dec. 18)
August 1992: 10.7 trillion yen ($85 billion). Japan passed its largest-ever stimulus package to that time, with 8.6 trillion yen earmarked for public works, 1.2 trillion to expand loan quotas for small- and medium-sized businesses and 900 billion for the Japan Development Bank. The package passed in December, but investment kept falling and unemployment rose. By the end of the year, Japan's debt-to-GDP ratio was 68.6%.April 1993: 13.2 trillion yen. At exchange rates of the day, this was a whopping $117 billion giveaway, again mostly for public works and small businesses. Tokyo erupted into domestic politicking over election practices, the economy went sideways, and the government fell. New Prime Minister Morihiro Hosokawa floated tax cuts, deregulation and decentralization to spur growth. But as the economy worsened -- inflation-adjusted GNP shrank 0.5% in the April to June quarter -- the political drumbeat for handouts increased.
September 1993: 6.2 trillion yen. Mr. Hosokawa announced a compromise "smaller" stimulus of $59 billion, along with minor deregulation. He dropped plans for an income-tax cut. The stimulus included 2.9 trillion yen in low-interest home financing, one trillion yen for "social infrastructure," and another trillion for business. The economy didn't respond. By the end of the year, Japan's debt-to-GDP reached 74.7%.
Sound familiar? We aren't even halfway through the decade. Read the rest here:
Japan's economy grew very anemically during that decade, but its national debt exploded. Given that our debt is already enormous and our lawmakers seem oblivious to the consequences of this, I predict that sometime (definately in my lifetime) our country will have a collapse of epic proportions. The government's position of spend, spend, spend its way out of problems mirrors many of its consituents ironically. I can't fathom how they don't see the irony Poor habits by citizens are mirrored by our government. Does one lead the other? I am certain there is some degree of correlation.
