Prime Minister Junichiro Koizumi may want to make his postal privatization quest the focal point of the Sept. 11 election, but economics professor Masaru Kaneko argues voters should instead cast their ballots based on how he has steered the economy and society.
Unlike many economists and government officials, who gauge socioeconomic trends with complex simulations and indexes, Kaneko of Keio University has come up with a simpler method to provide a clear picture of the current state of the nation.
He described it in his recently published book, “I’ll Tell You This from 2050.”
In what he calls his linear simulation, Kaneko uses various figures, including the nation’s birthrate and employment rate, follows them from the 1990s to the present and simply draws straight lines extending the trends toward 2050.
This simulation shows the birthrate, the percentage of the population that paid the mandatory national pension premiums, the employment rate of new college graduates and the number of farmers all heading toward zero by around 2050.
The employment rate for new college graduates, for example, dropped to about 55 percent in 2004 from around 80 percent in 1992. The percentage of people who paid national pension premiums dwindled to about 65 percent in fiscal 2002 from some 85 percent in fiscal 1991.
“This is a warning,” Kaneko said in an interview with The Japan Times. “When I simply extended those trends, I found the figures all came to zero around the time when the graying of Japan’s society is expected to peak,” when people aged 65 or older will make up the largest segment of the population. “It’s such an uncanny coincidence.”
Public-sector debts, suicides, the number of “freeters” (job-hopping part-timers), personal bankruptcies and the average life expectancy of Japanese will meanwhile continue to soar, he said.
Suicides nearly tripled to some 30,000 a year in 2004 compared with around the end of World War II. The government’s debt as a ratio to gross domestic product nearly doubled since 1991 to some 150 percent in 2005.
Of course, critics say the real world will differ from Kaneko’s linear simulation because of numerous complicated and unpredictable factors. But for that same reason, he said other forecasts using official data cannot be reliable either because they tend to be based on false assumptions.
For example, the pension reform plan mapped out by the government last year is already on the verge of collapse, as it was based on a birthrate of 1.32. The birthrate was revised downward to 1.29 immediately after the reform bills were rammed through the Diet in June 2004.
“One thing is certain,” he said. “The society will not hold out long if left as it stands now.”
His warning follows a January forecast by the Council on Economic and Fiscal Policy that the primary balance should recover by 2012.
Citing years of government miscues following the burst of the asset-inflated bubble economy in the early 1990s, Kaneko questioned this rosy scenario.
Over the past four years, the prime minister has asked people to endure the pain of structural reform while supporting privatization of debt-laden public entities, but little has been done to improve the quality of life since the 1990s, Kaneko said.
“The question now should not be whether to support or oppose postal privatization or the move toward a private sector-led economy,” he said. “The issue is not that simple. Utmost priority should be placed on making the society sustainable toward the future.”
To begin with, Kaneko wants the government to carry out pension reforms, integrating the programs covering salaried workers, the self-employed and public servants, into one system to give people an equal footing on basic social security, regardless of status or job.
He said wealthy people and corporations should pay more taxes before any hike is made to the 5 percent consumption tax or salaried workers’ income taxes.
“If the social system is reformed in a way that abolishes unfair tax and social security systems, each individual would be able to have a freer and more diverse lifestyle,” he said. “There’s more than enough room for this country to rectify its socioeconomic system.”
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