Japan Bets $81B On Plan To Avoid “Double-Dip Recession”

The Daily Reckoning ^ | 12-8-2009 | Rocky Vega

[blam]

Japan Bets $81B On Plan To Avoid “Double-Dip Recession”

By Rocky Vega

12/08/09 Stockholm, Sweden – Today Japan decided on spending 7.2 trillion yen, or $81 billion, in stimulus. The funds will be used for loan guarantees and employment subsidies as well as to encourage purchases of energy-efficient goods.

However, according to Bloomberg coverage:

“Not everyone thinks the spending will help the economy. Morgan Stanley Asia Chairman Stephen Roach said Hatoyama needed to be ‘much more aggressive’ with his policies.

“‘It’s tiny,’ Roach said of the stimulus in an interview on Bloomberg Television yesterday. ‘This is an economy that went into its worst recession, the second lost decade, late last year and is barely coming out. The new government is not off to a good start in formulating policy strategy.’”

Regardless of the size, whether the government stimulus is a good idea remains debatable. Japan already has an excessive debt burden:

“[Japanese Prime Minister] Hatoyama’s ability to revive the economy has been limited by the nation’s swelling debt burden, which is already the largest in the industrialized world. He said the package was a reflection of the government’s will to spur growth without blowing out growing public debt.”

[snip]

[jessduntno]

“Japan Bets $81B On Plan To Avoid “Double-Dip Recession””

Pikers...Bammy spends that in his sleep...

[Red Badger]

I see they have idiots in Japan just like ours..............only shorter............

[flushing_kenny]

And these idiots in the Diet have been at it longer. After 19+ years, you would hope that they finally figured out that what they were doing was not working at all. One of the biggest problems is that the reform-LDP, whose 10(?) seats help to form the coalition, are demanding spending and more spending. Actually, they are worse than the socialists.

Hatoyama has, simply put, no clue. Instead of looking at the Laffer curve and the size of government and regulation as the problem, they prolong the pain. Now about that 2nd stimulus Obama is talking about....