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The New Japanese Stimulus Measure Is A Joke

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The New Japanese Stimulus Measure Is A Joke

This new Japanese stimulus package is a joke. It's a complete waste of time and money.

Here are some excerpts taken from an earlier Benzinga article about the package:

"The Japanese government released details of its newest $11 billion stimulus package Friday, saying that the economy, while not as weak as originally feared, still needed help.

Half the money will go towards extending consumer energy-saving product subsidy programs, with additional funds towards job support programs for new graduates and incentives for companies to keep jobs within Japan.

The package will be paid for with reserve funds in the current budget.

The government believes the stimulus package will bring in 200,000 new jobs and raise the nation’s GDP by .3%. A revised report indicates that the GDP had grown at a 1.5% annualized rate between April and June, a notable step up from initial reports that had it at .4%."

$11 billion dollars? Do you really think that's going to do anything to the world's 3rd largest economy. That's not even a rounding error anymore. The government spends $11 billion probably in less than 24 hours.

$11 billion for 200,000 jobs isn't astronomically high, even by American crazy government math standards. It equates to $55,000 per job, which is a fairly decent wage.

I just don't see how a country with a population of 127 million people would be affected by a $11 billion stimulus package. That's nothing more than a drop in the hat. Handing out light bulbs to people isn't going to cut it. You need demand for products, you can't stimulate demand. It's a mindset. You can take all the fiscal and monetary measures you want, and if consumers mindsets aren't changed, then it was all for naught.

I believe Japan should wait on this stimulus package, and either provide a larger package which would affect the country greater, or encourage R&D growth via additional tax incentives so that products and new ideas can spur innovation and growth.

Taking from tomorrow only helps today, it doesn't help tomorrow.

 

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Posted-In: Japan stimulus packagePolitics Economics General