Japan seeks new ways to boost economy (Infrastucture spending in the 90s failed!)

Wall Street Journal ^ | 1/14/08 | John Murphy

[Golddigger3]

. . . The infrastructure spending that other nations hope will be a silver bullet is a cautionary tale in a country dotted with such construction projects that never lived up to expectations of lifting the economy during the downturn of the 1990s.

Now Japan is back in recession. This time, there is scant enthusiasm in the world's second-largest economy for going into debt building roads, bridges and other massive projects . . . The thinking before was that big construction projects would create jobs, encourage travel and stimulate domestic consumption. Instead, the economic benefit was minimal, and municipalities -- and the country -- were saddled with huge debts.

"The era of big public works projects is over," says Junki Yamao, Shinjo's mayor. A recent editorial in the Nihon Keizai Shimbun business newspaper, warned Japan against repeating past mistakes with a stimulus policy "that turns back the clock." But after spending 150 trillion yen since 1998 on economic packages now largely seen as failures, Japan isn't sure what kind of stimulus to try.

As the U.S., China and other nations focus on infrastructure programs to rescue their economies, Japan is struggling to chart a different course to recovery. Since September, Tokyo has announced three economic rescue plans. Unlike the 1990s, when public works made up the bulk of stimulus spending, this time the packages consist largely of tax cuts, highway toll reductions and cash rebates that economists say are inadequate to turn around the economy. . . .

[The Great RJ]

The WPA, CCC and other government public works projects during the 1930’s didn’t work either and actually prolonged the Great Depression. I guess we are condemned to repeat history.

[LiberConservative]

The Japanese are always one step ahead. I would prefer we learn by their mistakes instead of going insane and trying the same thing expecting a different result.

[SaveTheChief]

The luxury we have here in the United States is that we can see the effectiveness of socialism and socialist economic policies enacted by other nations.

It is apparent that we do not learn from these examples of failure, as we continue to elect those who seem to be eager to make the exact same mistakes.

[Golddigger3]

Peter Schiff says that government borrowing to get new roads and bridges is like a broke homeowner trying to solve his problem by remodeling his bathrooms.

[Release]

“WPA, CCC and other government public works projects during the 1930’s” as you said did not work. But, the greatest difference is society today from then. Back then women were not part of the work force and most jobs were manual labor. Today the work force are technical in nature and office workers. Are those workers fit for WPA and CCC manual labor jobs? Who is paying off who in this stimulus bill the only winners are labor unions and builders.

[Alberta's Child]

This would be an accurate statement if the government built roads and bridges just for the sake of building them.

The reality is that roads and bridges are not like the pyramids in Egypt. They are absolutely essential for the economic well-being of this country. So a better comparison would involve a broke homeowner who borrowed money to unclog his toilet.