Japan's stimulus

Pity Japan’s Democratic party. When they took power less than three months ago, party heavyweights were hoping to use the fat from a huge stimulus package drawn up by the former ruling Liberal Democratic party to help fund implementation next year of some of their generous manifesto pledges. Now, however, they feel forced to use all the Y2,700bn or so trimmed from the last package and a lot of other money besides to launch a Y7,200bn stimulus effort of their own.

A first glance over the rough framework released on Tuesday suggests the spending priorities are reasonable and there has been some effort to link this package to longer-term DPJ goals such as much more generous support for parents. But the inevitable fact is that spending so much now will make it harder to spend in the fiscal year starting April. Expect intensifying debate among the party’s top leaders in the next few weeks about which manifesto pledges should be jettisoned first.

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