Is there no end to Japan's economic policy merry-go-round? In 1996, the rationalist economists persuaded the politicians to raise taxes and cut public spending in a bid to reduce the large public debt. When the economy slumped as a result, the government moved quickly to cut taxes, increase public spending and shelve the debt problem.

Now the rationalists are at it again, complaining about a predictably even larger debt problem. But does this mean they want to cut the public spending seen as crucial for reviving the economy? A choice has to be made, for as Prime Minister Keizo Obuchi points out, if you chase two rabbits simultaneously you end up with none.

He should also tell the opposition parties now yapping at his heels about the debt problem, that it was precisely they who three years earlier were nagging constantly about the need for permanent tax cuts. Permanent cuts guarantee a very serious debt problem for a very long time. And since the cuts are largely saved, they do little to expand demand.