Treasury Won’t Mint Platinum Coin to Avoid Debt Ceiling because it was insane in the first place. The truth of the matter is simple: if you are going to have a coup, do it. If the President is unable to run the country due to Southerners, mainly, refusing to pass budgets, we either have a coup or we stop our wars suddenly and totally. It is pretty simple. But AIPAC wants the wars to continue and the rich want their tax cuts no matter what while the politicians use the excuse, ‘We have no money!’ to cut social services, the wars rage onwards, Pentagon spending continues to shoot upwards and the trade deficit continues to be ignored and our banking system with no capital continues to lend money they don’t really have…Krugman wants to fix this by imitating Japan. And frankly, the GOP wants this, too.
Japan is squeezing its working class ruthlessly. Their share of the wealth has not just fallen, it has collapsed. There are homeless Japanese and nothing is done for them. The young can’t find jobs that pay a living wage. The healthcare system is falling apart with ambulances being turned away from emergency rooms left and right. The rich pay less and less in taxes while regressive sales taxes double. Meanwhile, Krugman continues his admiration of the most mismanaged system on earth: Worthwhile Japanese Initiative – NYTimes.com
But if Japan is doing relatively well in cyclical terms, it’s still far from clear that macroeconomic caution is appropriate. After all, Japan has a much longer-term monetary issue: persistent deflation, which among other things has meant that Japanese real interest rates have been well above those in the United States even though nominal rates are low. (I wrote about that here.)
What Japan needs, then, is to boot itself out of its deflationary trap; and a situation where there isn’t too much economic slack is actually a very good time to do that.
Japan has a taxation problem. Like the US, they have rates that look solvent on paper but since the rich run things, they have cleverly inserted all sorts of legal tools to evade taxes. Just like Romney paid virtually 0% in taxes except during the one year he ran for President, the Japanese rich park their loot at offshore banks, too. They also, like all US corporations, use Chinese corporations to do the taxable labor while collecting the profits from the sales overseas and inside China. US and Japanese corporations fiercely fight any ability to tax their overseas profits.
So Japan and the US are both going bankrupt.
Here is another goofy article from the brilliant economist, Krugman:Japan’s Teachable Moment – NYTimes.com. YIKES. The only lesson Japan teaches anyone is, if trade and business cartels run the government, it will go bankrupt due to tax evasion.
Krugman is happy the Bank of Japan will cease copying the German system and will ape the Federal Reserve: Stimulus package shifts emphasis from households to public works projects－ 毎日ｊｐ(毎日新聞). The money won’t go to the unemployed, it will go to Japanese crony operations who will continue cementing over all of Japan. Japan has a lot of this sort of thing which supposedly was going to protect the people from say, tsunamis. This was a total failure. Most streams and rivers anywhere near an LDP power base has both banks cemented, for example, making the country look increasingly ugly as well as being very destructive for natural ecosystems. So now there will be more of this sort of garbage while things needed to survive are ignored.
The repudiation of the German model is not total: Abe says BOJ must set 2% medium-term inflation goal. After WWII, the yen collapsed in value and nearly 500 yen went for a dollar whereas today, it is now around 85 yen to the dollar. The elderly Japanese remember their life savings vanishing due to war inflation. So they don’t like inflation. Inflation isn’t a good thing in itself. It does show the creation of credit which devalues previous money unless interest is handed off to people who park their capital in banks.
The BOJ set its current 1% inflation target last February and eased monetary policy five times in 2012.
They don’t have inflation not because money printing is good. They don’t have inflation because money isn’t circulating! And why is that? Well, the working class can’t buy stuff anymore, can they? All the money created by the Bank of Japan five times went straight into the pockets of the very rich who moved it all OFFSHORE. Like they do here to us.
Tax Hikes to Hit Japan’s Wealthiest – WSJ.com
“There’s already an agreement with the LDP to introduce a more progressive tax regime,” New Komeito leader Natsuo Yamaguchi said at a news conference Thursday. The proposal would need to pass parliament before becoming law.
Yes, they plan to try, yet again, to tax the rich who own the LDP machine. HAHAHA. Right! And the moon is made of green cheese. Look at the graph above: tax revenues have collapsed. Not ‘drifted downwards’. It fell by 50%. It is interesting that solvent Germany has a higher tax rate than the US and Japan who have the lowest rates of all the top countries. While tax revenues collapsed to half the amount needed to run things, debt soared until it is unmanageable. And can’t be easily fixed. Japan has to tax the rich heavily for at least 20 years to make up for these losses. Instead, they will punt the ball forwards and hope raging inflation fixes the debt.
Only this will kill what remains of the Japanese people.
Japan Raises Sales Tax to Tackle Debt – WSJ.com
The hard-fought tax increase shows how it is possible for advanced democracies—struggling to curb government borrowing and adjust fiscal policies that have allowed their citizens to live beyond their means for years—to cut government borrowing.
But it also highlights the difficulties. Despite the tax increase, Japan’s spending is still expected to far exceed government revenue for years, and analysts say more tax increases and benefit cuts are needed to address budget shortfalls.
A 100% increase in the most unfair form of taxes kept the rich from paying more in taxes in the past. Note how the Wall Street Journal thinks doubling this regressive tax is OK. Look at the graph above: spending on research and science was triple today’s investment in Japan. Public spending was even greater in 1960 compared to today in relative size to government spending.
The elderly spending and social spending has doubled in size but look at what exploded in size: servicing the national debt. And much of this was, after 2000, at zero interest! But in the 1990’s it was far higher in interest rate cost which is why the overall cost continues to double in size every 20-30 years. Eventually, at this growth rate, it will be 100% of the budget if there are no huge taxes on the rich. Servicing the debt and paying for the elderly now takes up 50% of the budget in Japan.
So, are taxes on wealthy export corporations going up? What is Japan’s New Tax Rate? | Tax Foundation
According to METI, the effective corporate tax rate will be as follows [found here]:
40.69% (current rate) → 38.01% (FY2012 to FY2014) → 35.64% (In and after FY2015)
NO. It is being slashed! Can they tax the poor? The doubled sales tax does eke some yen out of the hole-riddled pockets of the poor. But it does little to get the economy growing, indeed, it has more to do with killing the economy. The taxes on the rich irritate them but taxes on the poor destroy society and I thought even idiots could figure this out with the French Revolution. This occurred when taxes on the poor went up while the elites cut their own taxes.
Some clowns are suggesting Japan needs more workers; News Navigator: Why can’t Japan’s university graduates find a job?－ 毎日ｊｐ(毎日新聞)
Japanese corporations still practice a recruiting system in which they hire new graduates collectively at the same time right after students graduate from universities. Once the students fall out of that system, it becomes extremely difficult to get out of a track of unstable employment...Out of 560,000 students who graduated from universities in Japan last spring, about 128,000 haven’t found a job yet nor advanced to higher educational institutions…..The unemployment rate for young people tends to be higher than the average of all generations. The problem is, however, that the gap between the young and older generations has widened. Since the late 1990s, unemployment rates have been increasing among people in their early 20s, drastically surpassing the all-age group average…In 2010, 47.3 percent of men and 34.5 percent of women in their early 30s were unmarried. The figure has more than doubled for men and tripled for women since 1980.
Why are rich Japanese tolerating social collapse? Why are they content to see their home base die? A question to ponder. They worked with the imperialist military dictators to impose a draconian regime on Japan with lots of indoctrination of children in order to expand an empire and then these same rich people who still run Japan sat on their asses while the country was systematically destroyed during WWII and refused to surrender, fearing they would lose political and economic power.
Which was handed back to them on a silver platter by the US due to Chairman Mao and Stalin. To make Japan strong we re-harnessed the nation to these vicious, war criminal elites and then turned the US into a mirror image of Imperial Japan which disastrous results. Now our own elites and Japan’s elites are pushing for war with China: China rebukes Japan after both sides’ planes fly near islands. And there is no discussion about this catastrophe, either, here in the US.
We cannot afford any wars right now and we can’t make a million trillion dollar coins to pay for wars, either and war inflation is a disaster, not a blessing.
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9 responses to “Inflation Keynesian Krugman Wants Us To Imitate Japan’s LDP Wild Spending”
The economic model is a disaster. I recommend that everyone listen to Webster Tarpley’s world crisis radio to understand how the Mich. Gov has circumvented election results to call for an emergency bank-run bond group to kick the elected officials out of office and run the Mich budget. That is a coup and they have already steamrolled through other parts of Michigan. Obama will not do anything about this, so you can see the beginnings of the fascist movement taking place, state, by state.
They are also giving China 51% managing partnership of GM in China. Yes, folks no two times of history look identical, but fascism post-Industrial world style will look more like this and less like brown shirts.
I always say that when they discuss Milton Friedman and the global no regulations scam, they will begin to walk this back, otherwise–we’re over
Check out this Bill Moyers video at Jesse’s cafe. He says it ALL. http://jessescrossroadscafe.blogspot.com/2013/01/bill-moyers-crony-capitalist-blowout.html?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Caf
@vengeur: you can use link shorteners such as goo.gl, tinyurl.com or bitly.com and avoid that long URL column overlap.
Great link, I shared it with another blog and people appreciated it.
It is one of many things that has to change if this country is to survive!
Max Baucus is way more Republican in attitude than he is a Democrat. He got in the way of any real health care reform as well. He’s just a little corporatist and should be called out for that.
Meanwhile, Krugman continues his admiration of the most mismanaged system on earth!!!!!!
I have pointed this out before, in the Times, Krugman said TARP
‘should have been bigger’.
No doubt he deserves more Nobels etc, for his Genius.
Yes, this is most infuriating. The Times did let me dispute with him his take on Japan being a fine example and I wasn’t the only one who objected to his story about Japan being something to emulate.
But the average American has no idea at all how Japan is internally collapsing.
You are not in Japan but…does the average Japanese have an idea at all on how Japan is collapsing ??????????????
I’d like to thank you for the efforts you’ve put in penning this blog. I’m hoping to see the same high-grade content by you later on as well. In truth, your creative writing abilities has encouraged me to get my own, personal blog now 😉