Old Style Redistribution of Wealth

As one result of expectation-oriented economic policy initiated by Prime Minister Shinzo Abe, the budget plan for FY 2014 swell to the extent of ¥96 trillion, which marked the greatest amount ever. The main reasons were social security, infrastructure and security. Among them, increasing spending on social security would be inevitable, because of natural increase of the old agers. However, infrastructure and security were a reflection of political arbitrariness drawn by Liberal Democratic Party. With this unreasonable return to old budget structure, the amount of national debt keeps on inflating.

The margin the government will get by raising the rate of consumption tax next April is supposed to be used for social security. While the government explained that all amount of that margin would be injected into social security budget in FY 2014, it will actually be a replacement of debt, which has been a part of resources until FY 2013. No one can expect any qualitative improvement in social security. The people have to keep on worrying about their future.

What drove the old style lawmakers in LDP crazy was disaster prevention budget. In the name of preparation for future natural disaster, the government allowed various menus for construction projects. They included the budget for preventing agricultural damage by boars, deer or monkeys, enhancing role of national parks and low-carbon projects. The government and LDP call those earmarked projects “homeland strengthening.” But, how can we regard getting rid of boars from farmlands as the preventing measures of disasters such as earthquakes, tsunamis or storms, anyway?

Security measures included buying MV22 Ospreys, Global Hawks and increasing personnel of Self-defense Force and Coast Guards. While it is obvious that the concern is mainly about assertive actions of China in East China Sea, this is a consequence of poor diplomacy toward China, with no effective impact on improving the bilateral relationship. In addition, Abe wants to pave the way for constitutional amendment through accumulating facts of necessity for broader military abilities.

Abe allowed those excessive interests, because he believed that would lead to economic revitalization. However, they only contribute to major corporations, like Toyota or general construction firms, and do not work for small businesses, especially new ventures. Deregulation efforts have still been in half way. Total amount of newly issued national bonds will be ¥41.3 trillion. Although the number is smaller by ¥1.6 trillion than the amount last year, it is still big when it is considered that the introduction of higher consumption tax rate will contributing ¥4 trillion increase in national budget.