Saturday, February 12, 2011

Three Short News Stories About How Messed Up Japan's Finances Are

Here's three news stories on Japan this morning that just made me roll my eyes. The first one shows how Japan's public debt hit new highs... This causes the incompetents in the Japanese government to panic and try to throw a budget together somehow....

From The Wall Street Journal: 

Japan's outstanding public debt hit a record Y919.151 trillion at the end of last year, the Finance Ministry said Thursday, likely fueling concerns over the nation's fiscal health and adding to a sense of urgency within the government to quickly formulate a tax hike plan. The ministry's quarterly data showed public debt rose 1.1% from the end of September, reaching a level equivalent to 194% of Japan's nominal gross domestic product for the fiscal year ended March 2010. Central government liabilities tracked by the data include government bonds, short-term debts called financial bills and other kinds of borrowed money. The picture of Japan's fiscal house gets even worse if the long-term debt of local governments worth around Y200 trillion is also taken into account.

Writer's rendition of Japanese PM Naoto Kan

Like I've written about numerous times, these idiots in the government never have the idea to cut the budget. All they ever think about is raising taxes. But the people are taxed out already. More taxes are not the answer. Cutting expenditures is and the Japanese people are starting to get fed up with high taxes. There is a movement afoot to do something about them too.

The Economist reports:

It was hardly a "mad-as-hell" moment, but still. On learning on February 6th that he had won a landslide re-election victory as mayor of Nagoya, one of Japan's biggest industrial cities, Takashi Kawamura put on a pair of black rubber boots while a small group of supporters threw buckets of cold water over his head. Hours later, with a nod to America's tax-cutting rebels, Mr Kawamura declared that a kind of tea party had been born in Nagoya. He sat alongside his political ally, Hideaki Omura, who on the same day thrashed his rivals for the governorship of the surrounding prefecture of Aichi, home to Toyota. It was hard to judge how serious they were, not least because, dressed in anoraks, they looked like the Two Ronnies, a 1970s British comedy duo. "This is a citizen's revolution," Mr Omura declared.

Finally, as a result of these problems, and how the government never tables any ideas as to how to cut expenditures and only raise taxes, I predicted how current Japanese prime minister Naoto Kan will be out of office by the end of June.

Bloomberg Reports:

Japanese Prime Minister Naoto Kan's inability to break a stalemate over budget legislation threatens to make him the fifth straight premier to last no more than a year and end efforts to rein in the world's largest public debt. Kan has been unable to persuade opposition lawmakers to agree on financing bills for his record 92.4 trillion yen ($1.1 trillion) budget that begins in April, 44.3 trillion yen of which must be funded by government bonds. Finance Minister Yoshihiko Noda last week said Japan's economy faces "the risk of economic slowdown" if parliament fails to move.
Sometimes I get complaints from readers saying that I don't specifically state what Japan's government should cut from their budget... My friend's, there are a million things that could be cut. I would begin with something like a 10% ~ 20% across the board cut.

Here's is some information for you. Where should we cut? I think we could cut everything by at least 10% across the board and still be fine (10% probably would only buy us a year or two's time!)

Where should we cut? You decide. Have a look: 

Especially look at page 2:

We can definitely cut military expenditures. According to Wikipedia as of 2007 Japan is #7 in the world for military expenditures.  (We spend more than 0.8% of GDP on the military) Spending in 2010:  ¥47,903,000,000,000 (at ¥80 to the dollar) that's about $58,680,000,000.

When we have the US military umbrella and the USA spends more than the rest of the world combined, why is Japan spending all this money? How about cutting that into half?

Cut military pensions too

Overseas Development? ¥682,000,000,000  that's  $8,350,000,000... Yeah, 15.7 of Japanese are under poverty line according to NY Times but we're throwing money away to other countries. How about cutting that to zero? 

Further down below, on the same page, you'll see ¥5,196,800,000,000  ($63,658,000,000) for "miscellaneous." Yes, this is the category that our politicians get into scandals about every year for having geisha parties and lighting up the town. How about cutting all politician's staff and budgets by 40%?

I could go on and on. Check top of page 4. A ¥13,000 allowance for every child!? About $160.... Morons! Why don't they just cut our taxes rather than just giving us our money back?

Remember when former US president Bush did this crap?

A lousy $160 per child? I can get twice that for a kidon the black market! Of course, I am only joking.

Too bad this debt problem here is Japan is not a joke.

Thanks to 
News on Japan

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