Where is the Japanese economy headed, and how to deal with it

1) Two things the government should do

Why is the Japanese government able to borrow so unrestrainedly? This is because Abenomics and unconventional monetary easing are continuing, and the Bank of Japan is effectively providing fiscal financing (the central bank directly underwriting government bonds to cover the fiscal deficit). However, there is no "exit" either. -

There are only two ways for Japan to rebuild its economy and put its finances in order. The first is not to waste money like the gasoline subsidies and the new coronavirus-related leave support funds and benefits that have fallen prey to fraud. The other is not to deceive the redemption of government bonds by refinancing or deferring them, and not pass the burden on to children and grandchildren.

On the other hand, it is not possible to rebuild the Japanese economy and improve the fiscal deficit with a “new capitalism” full of foolish strategies. I want you to immediately stop the bad habit of throwing away the budget for the next election without thinking about the baby who is born with the cross of debt. Otherwise, even if the Kishida administration lasts for three years until the next national election, it will be "three dark years" for the Japanese economy, not "three golden years." (Kenichi Ohmae, news.yahoo.co.jp)

2) Japanese people no longer buy Japanese stocks.

The spread of "savings to investment" among working-age people due to the coronavirus pandemic has also led to the majority of money going to overseas stocks, mainly in the United States. The growth story of Japanese companies pales in comparison to the hugely profitable U.S. tech companies. Buying by the Bank of Japan and public pensions, which have supported Japanese stocks, will decrease in the future, and eventually they will turn to selling. At this rate, there will be no buyers. (Nikkei 2021/12/20)

3) Corporate tax, income tax and tobacco tax as revenue sources for increased defense spending

The government and the Liberal Democratic Party continue to oppose Prime Minister Fumio Kishida, who is calling for a tax increase. Within the cabinet, Sanae Takaichi of the Ministry of Economy and Security and Yasutoshi Nishimura of the Ministry of Economy, Trade and Industry are advocating cautious arguments, bearing in mind the impact on wage increases. Even within the Liberal Democratic Party, voices opposed to the tax increase itself are being voiced one after another, centering on Abe's faction. (Nikkei 2022/12/15)

4) Where is Japan Heading:

As you can see from the above article, Japan has accumulated debts and continued to spread them. As a result, the metabolism of Japanese industry stopped, leaving behind a large number of senescent cells just like the human body, promoting the aging of Japan, reducing the competitiveness of Japanese companies as a whole. At the end of the year, Prime Minister Kishida suddenly became aware of this situation, citing the need for a tax increase as a reason for defense spending.

In the future, Japan will suffer from tax hikes in order to pay back the accumulated debts of the past for a long time, and consumer prices will still increase because of corporate costs (increase in import prices due to yen depreciation, energy, wheat, etc. due to the war in Ukraine). Stagflation (stagnation of economic activity and sustained rise in prices coexisting) will continue because it does not reflect all of the rising prices.

In the Japanese industry, while tourism-related business by inbound tourists is growing, the general consumption of the people has fallen, and eating out is sluggish, and the people prefer lower-priced products. tend to decline. Since the current price of the Japanese stock market is maintained by the government's buying support, it is better to sell before the big fall comes and turn it into an asset. Just as the government has proposed a tax increase, the unnatural economic system will have to be corrected in the near future.

5) Future measures:

Review all costs and try to shrink the household budget. You will need to move your house to the suburbs, build a field, and make your own food. Preparing for the long-term recession by repairing the house rather than saving money for the future is the basis of each family's future plan.