It sounds like a good idea until you realize that Japan is not "wasteful" as such, it is structurally unproductive. And that unfortunately is unsolvable without Japan being re-invented which is the very last thing the Japanese want as proven by the recent election of ultra-conservative Takaichi.
As the young, bold, hard working post-war generation which rebuilt the country in the 50s, 60s and 70s retired and were replaced by the grey, take-no-risk suits of the 1980s and 90s, the country stalled.
Japan is what happens when the asteroid strikes and somehow the dinosaurs survived. Tyrannosaurus Rex is now Tyrannosaurus Neko (Cat). Cute but 100 times smaller with no change whatsoever. It is still hunting (or rather absorbing) nimble mouse-like mammals which consequently never had a chance to grow. On these Galapagos Islands where evolution went sideways, mini-Pterodactyls fly high above a barren ground were little grows. And slowly the Islands sink back into the ocean of international finance thanks to the ever shrinking Yen.
What exactly can Katayama do? Save a few million dollars here and there? When the Government already plans to spend one hundred times the amount in just a year and unhappy markets guaranty that the country will from now on have to pay punishing interest rates for its gargantuan debt hovering above the coast as a gigantic tsunami wave representing 270% of the country's shrinking GDP.
If the country's population, the oldest in the world, was not shrinking by almost a million people a year, we could call it, desperate although financially speaking, it is apocalyptic. By juggling skillfully between deflation and inflation, we have a new kind of stagflation, different to the one in the 1970s with low inflation, except for food and mild deflation for salaries, resulting in rapid impoverishment of the population.
This can go on a little longer, until either the Yen crashes lower or the international financial markets blow. Without forgetting that Japan is long overdue for a major seismic shock. But when the earthquake finally comes, it could be a relief since finally Japan will get a chance to rebuilt itself. Once again!
Authored by Victoria Friedman via The Epoch Times,
Japan’s finance minister on Nov. 25 unveiled a plan to cut wasteful government spending, drawing parallels to the United States’ Department of Government Efficiency (DOGE).
Japanese Finance Minister Satsuki Katayama arrives at the prime minister's official residence in Tokyo, on Oct. 21, 2025. Kim Kyung Hoon/Reuters
Finance Minister Satsuki Katayama launched the “Office for Administrative Reform and Promotion of Efficiency,” which she said will work with the finance and internal affairs ministries to review measures such as government subsidies and special tax treatments for companies, according to The Japan Times.
“The public requires the government to show a constant commitment to maintain fiscal sustainability. It is crucial that this commitment is always present in Kasumigaseki and Nagatacho,” Katayama said during a press conference, referring, respectively, to Japan’s government district and where its parliament—the Diet—is located.
Katayama sought to distinguish Japan’s office for reform from the U.S.’s efficiency agency, saying, “Unlike DOGE, we’re not aiming to overhaul government organizations,” but rather on reviewing how taxpayers’ money is spent.
“To maintain trust in the sustainability of Japan’s finances, it’s very important to show the public how we are always looking into how we spend,” she said.
Japan Just Pulled the Pin as Global Debt Bomb is About to Explode
Japan holds $1.2 trillion in U.S. Treasuries. But that anchor may be slipping.
With a 250% debt-to-GDP ratio, Japan has long defied gravity by keeping yields near zero. That era just ended. Yields on 20- and 30-year Japanese bonds are breaking records. Inflation is rising. The yen is falling. And Tokyo is about to flood the market with more debt.
The result? A no-win scenario for the Bank of Japan: print more yen and crash the currency, or step back and let rates spiral. Either choice risks triggering a global debt shock.
Japan's capital is already moving home. U.S. debt markets could lose their largest foreign buyer just as Washington is paying over $1 trillion annually in interest.
Worse, the yen carry trade... a multi-trillion-dollar global liquidity engine is breaking down. One false move, and the unwind could hammer treasuries, stocks, even real estate.
This is not theoretical. It almost broke in August 2024. The next shock may not pass so quietly.
No comments:
Post a Comment