Prime Minister Yoshihiko Noda on Oct. 17 told the Cabinet members to draw up an economic package because the Japanese economy is losing steam. On the surface, his move seems reasonable. Japan’s real economic growth plummeted to an annualized 0.7 percent in the April-June period from the annualized 5.3 percent growth in the January-March period. But his plan contains inherent problems.
First, Mr. Noda announced his plan abruptly at a time when there is no prospect of the government obtaining sufficient funds to implement the economic package. The Diet has not yet enacted a bill to float bonds to cover some 40 percent of the fiscal 2012 budget due to political bickering between the Democratic Party of Japan and the bloc of the Liberal Democratic Party and Komeito. The confrontation also is preventing the government from submitting a fiscal 2012 supplementary budget.
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