The economic package that the government unveiled on Wednesday, together with the Bank of Japan’s decision to expand the credit supply, represents a concerted attempt to fight deflation. The comprehensive program includes measures to accelerate disposal of bad bank loans, help rebuild debt-heavy but viable businesses, and spur economic growth. But whether it will really speed up bad-loan write-offs is at best uncertain.

The bank reform plan — the centerpiece of the package — is a far cry from the hard-hitting draft worked out by Mr. Heizo Takenaka, the financial services minister who oversees the banking system. The safety nets for easing the impact of debt cleanup, such as from increased bankruptcies and layoffs, are anything but sufficient. There are no effective measures to create new demand.

The bank restructuring plan calls for, among other things, strict assessment of bank capital. Its keyword is “deferred tax assets,” a banking term that refers to future refunds on taxes paid for loan-loss reserves. The trick is that these future tax credits are counted as part of capital. In the case of top banks, these make up about 40 percent of their equity capital. This has given rise to criticism that bank capital is “inflated.”

Mr. Takenaka had proposed reducing that share to 10 percent, beginning in fiscal 2003. That would have required a drastic change in the “tax-effect accounting” rules, making it difficult or impossible for internationally active banks to meet even the minimum capital adequacy ratio of 8 percent. The result, as Mr. Takenaka had indicated, would have been bank nationalization.

So it comes as no big surprise that the Takenaka proposal has been emasculated in the face of fierce objections from worried bankers and politicians. In principle, though, the bank reform plan supports the Takenaka vision, calling for a “prompt review” of the rules. But it stops short of saying when they will be revised. The question has been effectively shelved, and a key engine for accelerating bad-loan disposal has been dropped, at least for the time being.

The Takenaka draft has suffered a serious setback in another important respect: bankers’ responsibility. The chief financial overseer had called for tough measures, including dismissal of top directors, in the event banks received public funds. The announced plan, however, says only that the government will “seek strict clarification of responsibility.”

All of this suggests, regrettably, that bad-loan write-offs may not accelerate as planned; they could even decelerate, depending on how things develop. The impression, as ever, is that the government — and the nation as a whole — is muddling through while putting off the hard decisions it knows it must make.

Experience abroad shows that bad bank debts can be cleared fairly quickly, in less than several years, through bold use of public funds. In fact, that is how the United States resolved its savings-loan crisis in the 1980s. More recently, following the Asian financial upheaval of the late 1990s, South Korea fixed its banking system through a massive infusion of taxpayer money equal to roughly a third of its GDP. Sweden nationalized two of its four major banks.

By contrast, Japanese banks are still struggling with mountains of nonperforming loans more than a decade after the asset-price bubble collapsed. Depositors are frustrated at the slow pace of debt disposal, but bankers are cautious, afraid of the possible consequences of bold reform. Their vehement opposition to Mr. Takenaka’s “hard-landing” strategy is proof that they do not want to take drastic action.

There is also the impression that the government is dissipating its already scarce resources. A case in point is a plan to set up a new entity to buy bad loans from banks as a way to help corporate restructuring. Why not make better use of the existing Resolution and Collection Corporation? Better use also can be made of another bailout organization, the one that buys shares from banks to rid them of cross-shareholdings.

Creating one new organization after another when existing ones can do the job is not wise policy. The public, already dismayed at the way the government has been handling the banking mess, has reason to feel that the government is only trying to patch up the situation. There is indeed a perception that the planned “industrial rehabilitation corporation” may be just another attempt to save debt-stricken borrowers.

The antideflation package also includes tax credits for research and development projects, steps to revive the stock and real estate markets, and expanded assistance to jobless workers and small businesses. All these are necessary measures, but here again optimism is not warranted, to say the least.

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