Stimulus package needs to be implemented to fire up economy
(From The Japan Times Nov. 1 issue)

刺激策早期実現で経済活性化を

On Oct. 30 Prime Minister Taro Aso announced a ¥26.9 trillion economic stimulus package in an effort to minimize damage to the Japanese economy from the global financial crisis. The economic turmoil could have a devastating effect on people's lives. The government is poised to start implementing part of the measures included in the package as soon as possible. This is a logical approach.

Mr. Aso apparently tried to give an impression to people that his administration is not engaging in pork barrel politics but is thinking of long-term policies. But it is uncertain whether people will take his statement seriously since no consensus has been formed even within the ruling coalition about the matter.

The prime minister said the government will not issue deficit-covering bonds to implement the economic package but instead will use reserve funds in special account budgets. But this will increase hidden deficits.

A special feature of the package is the ¥2 trillion in cash benefits to be delivered to all households. But there is no guarantee that households will actually use the money in a manner that will increase consumer spending. The possibility that they will use the money to increase their savings in preparation for a worse time cannot be ruled out.

The package includes measures that may help stabilize and strengthen the Japanese economy in the middle to long term, such as offering ¥1 million to small and medium-size firms, and ¥500,000 to large firms for each non-regular worker aged 25 to 39 they hire as a permanent worker and tax reductions to promote capital investment for energy saving.

Mr. Aso made it clear that he will postpone dissolution of the Lower House for a general election. This will harden the attitude of the opposition forces.

The ruling and opposition blocs should realize that they must do their utmost to expand domestic demand because the slump is gathering momentum.

世界的金融危機による日本経済への打撃を食い止めるため、麻生太郎首相は10月30日、26兆9千億円の追加経済対策を発表した。対策の一部を先行実施する構えだが、当然の動きと言えよう。

実施には赤字国債は発行せず特別会計の積立金を使うそうだが、それでは隠れ赤字が増える。

対策の目玉である全世帯への総額2兆円給付も、消費より貯蓄に回される可能性がある。

首相が衆院解散の延期を表明したことにより、野党は態度を硬化させるだろう。不況が加速する今、与野党は内需拡大に全力を注ぐべきだ。