Japan should issue more bonds to help boost the economy instead of attempting tax hikes, which might stifle a recovery, said Eisuke Sakakibara, a former Finance Ministry official.
"The government shouldn't raise taxes when economic conditions are bad," Sakakibara, now a professor at Aoyama Gakuin University in Tokyo, said last week. "They should even stop discussing the plan because expectations for higher taxes in the future could alone have a negative impact on the economy."
Prime Minister Yoshihiko Noda wants to double the 5 percent consumption tax to shore up the social security system, a plan that faces opposition within his own Democratic Party of Japan. An aging population and two decades of low growth have left Japan with a debt pile projected to exceed ¥1 quadrillion next year, the biggest in the world.