Skip to comments.Japan plans to cut state spending, could run out of money in a month
Posted on 08/30/2012 10:42:45 PM PDT by bruinbirdman
Japan's government is planning to suspend some state spending as it could run out of cash by October, with a deficit financing bill blocked by opposition parties trying to force Prime Minister Yoshihiko Noda into an early election.
The impasse in Japan's parliament has raised fears among investors that the world's third largest economy is being driven towards a "fiscal cliff".
"The government running out of money is not a story made up. It's a real threat," Finance Minister Jun Azumi told a news conference, making a last-ditch appeal for cooperation by opposition parties to pass the bill.
"Failing to pass the bill will give markets the impression that Japan's fiscal management rests on shaky ground," he said.
Unless the bill clears the current parliamentary session that ends next week, the government will start suspending or reducing some state spending to avoid running out of money for as long as possible, the finance ministry said.
Noda's ruling Democratic Party passed the deficit-financing bill through the lower house on Tuesday. But the opposition boycotted the vote, signalling the bill has little chance of clearing the opposition-controlled upper house.
Under the proposed contingency for suspending some spending, the finance ministry said government bond redemptions and interest payments on outstanding debt would not be affected as they will be made in full using reserves set aside for this purpose.
All state spending will be targeted, except for those that will severely effect public livelihood such as police, national security and disaster relief, Reuters reported.
Subsidies to local governments and state-run universities will be cut by half from the originally planned amount until the bill passes parliament, the finance ministry said.
The upper house has also passed a censure
(Excerpt) Read more at telegraph.co.uk ...
Radical concept. Why not just print money and borrow from china
The US ran out of money years ago...
They have $1 trillion in USD reserve, they’re not out of money, why don’t they use it
No way would China lend Japan the money.
China would have a little schadenfreude at Japan’s expense.
Most of Japan’s debt is internal.
Yep, old Socialist trick. Shut down government, blame Conservatives.
No problem, Japan - just do all your transactions in Obama dollars; the president’s printing up money by the boatload to cover his runaway financial excesses.
Well, well, there's an idea Hussein hasn't thought of, yet.
Imitation is the sincerest form of flattery
Get in line.