Abe set to unveil latest phase of 'Third Arrow'

“I wonder how many third arrows they plant to shoot. Are they going to do this every year?” said Ayako Sera, a senior market analyst at Sumitomo Mitsui Trust Bank.

as many arrows as Abe wants, practice makes man a perfect, only worry...rising national debt.

Meanwhile, the poor still pay a disproportionate amount of tax to the government, just to survive!

Several bold but politically contentious proposals, such as for labor market and agriculture reforms, were watered down or omitted as a result of discussions among myriad and conflicting interests.

All you need to know about this subject. When will Japan learn that consensus and Wa are nice goals, but, sometimes, as the saying goes "you can't make an omlette without breaking some eggs"?

Almost two years have gone by, I am still right here waiting for the 'Third Arrow' to arrive. Hopefully, this time is for real. No more lip service, please.

Enough with the talk, Abe.

Most Japanese consumers are still twitching after the first two arrows. This third one will likely be the one that puts them down.

...shot directly into his own foot.

I wonder how many third arrows they plant to shoot.

How many bodies does he plan to "plant" arrows in ?

Abe set to unveil latest phase of 'Third Arrow'

Bend over folks! Here it comes!

I have said this before, but here it is again.

Question:

Why does the LPD prefer JAM to JELLY?

Answer:

Because they can't JELLY their policies down people's throats....

Even a likely amendment to a law regulating dancing in nightclubs has to be “studied” first.

And that about sums it up, I suppose. How many months in power does Abe and Japanese government need before something as basic as that gets done?

kurisupisu,

the poor still pay a disproportionate amount of tax to the government, just to survive!

What is the proportion that the poor pay, actually?

But don't worry. In any case, the money is used to pay for pensions and health care for the elderly, as well as interest payments on the massive debts the democratically elected government has racked up over the past 2 decades, even though the elderly in Japan have most of the financial assets. (A review of NISA out yesterday showed that the over 60's were responsible for opening 60% of the NISA accounts, and it was the over 60's investing a similar proportion of the money too). But the poor should be content with this, since the government is just paying out pensions to the elderly as promised, even if they are racking up even further debts to do so.

Abenomics is more about slowing the economy down than reviving it. Corporate tax cuts are all well and good, but, with working people getting kicked in the teeth with high taxes on stagnant income, plus sky high health insurance premiums, and higher consumption taxes need a break too.

Also, spending cuts need to be part of any debt reduction plan. Increase the consumption tax won't work if there's no let up in borrowing money, and no reduction on income taxes across the board. The debt is a problem, but the main problem is an anemic economy. Tax increases won't lead to any revival in the economy.

Long term solutions would be too open Japan up to foreign investment, and international trade. Also, promoting, and growing its very small, fledgling entrepreneurial class. The government's largess to large, conservative, complacent corporations has to end. Self-employment, and entrepreneurship are what will drive economies in the very near future.

@jbinjapan yes, austerity measures indeed. We will all be begging on the streets like the greeks. We will be addicted to hot money. And have to prostitute ourselves to fickle and phillistine foreign investors with no interest in our continued prosperity. You, sir, have just recommended a set of measures that will make japan china and americas whore for all eternity. That might suit your interest, but its fooling no japanese.

Debt Japan are digested in Japan nearly all. Japan is owned by the financial assets of the huge 1600 trillion yen. The biggest problem with Japan is a "deterioration of the labor distribution rate" and "destabilization of employment".

Takenaka Heizo of the Japanese government to advance the economic policy the wrong, is a cancer.

@ANewAsia,

Sorry, I don't see how free trade makes any country "a whore" to others. So called "phillistine foreign investors" provide much needed jobs, tax revenue, and prosperity. Just as Toyota, Honda, Sony and many other Japanese firms have benefitted from investing overseas. Certainly, there are even Japanese individuals working, or investing abroad as well. There's nothing in my recommendations that suggest Japan prostitute itself to China and America.

Let's look at entrepreneurship now. The Internet and related technologies have made self-employment, and entrepreneurial ventures more accessible, and cheaper than it has ever been in the past. 3D printers, crowdfunding, fast prototyping services, etc. All these allow people to chart their own path to prosperity.

Far too many Japanese firms treat their employees as chattel, refusing to fully compensate for over-time, or new products created; using seniority as a basis for promotion instead of productivity or merit. Let's not forget, wages remain stagnant, and taxes on salaried incomes are more severe than on income derived from being self-employed (where one can write off many expenses).

Why should people work to build the wealth of a corporation that does not value their work, or respect their time when they can work for themselves, and enjoy more of the profit their work creates? Think of what women here deal with. Many corporate and government leaders see women as baby machines and servants to their male employees. Entrepreneurial ventures, and self-employment would provide more opportunities for young women to participate, and prosper in the economy.

As for begging on the streets, well, how does doubling sales taxes benefit the poor, low income individuals, or single income families with children? Higher food prices, energy costs, etc, won't make any nation prosperous, nor give businesses the means to raise salaries, or employ more people.

Spending cuts don't necessarily mean the targeting of helpful, beneficial programmes, There is a lot of wasteful spending in government (needless make work projects, bureaucracy, etc) that if cut, would free up more cash for social services, and essential infra-structure projects.

More people employed, with more of their hard-earned money in their pockets would make the sales tax increase much more effective. The status quo so far has only created high debt, income stagnation, tepid growth, and rampant cronyism. Investment creates jobs, higher net incomes build consumer confidence (and inflation). Gainful employment and higher net wages allow families to care for loved ones more easily.

@JBinJapan Theoretically, all the results you have raised sound very nice indeed, but it is premised on myriad faulty assumptions.

Foreign investment Japan has developed markets and is a cash rich country, although much of the liquidity is locked up in corporations, old people's bank account and The Pension Fund. Inflows of foreign money and so called investment is likely to be speculative and are unlikely to lead to better infrastructure or provide much gainful employment or training.

The UK and Singapore are cases on point. Essentially, the two countries have ceded control of all its industries to foreign players, when wealthy shareholders divest themselves without regard for whom is buying those stocks. Examples abound. Just to name one, the UK no longer has an indigenous automobile industry and has to appease Nissan and BMW constantly to prevent them from pulling out of the UK. 100,000 jobs are at stake and the UK faces the absurdity that Rolls Royce (cars, not turbines) may one day be based in Bayern.

In Singapore's example, 1/2 of the workforce consists of foreigners while many Singaporeans are compelled to leave the country to look for work elsewhere. This has been ascribed to an aversion by foreign firms and managers to employ locals, choosing instead to hire Indian and Chinese nationals content with half of what Singaporeans are paid. This has had the effect of keeping wages extremely low in the host countries while profits are repatriated. This is a genuine race to the bottom

Japanese Corporations There is a reason why most people opt to be "chattel" as opposed to entrepreneurs. Entrepreneurs typically thrive when there is an upturn in the economy, something which has of course eluded Japan for twenty years. Being a formal employee of a corporation means protection by labour laws and a good degree of income stability.

In any case, are you aware that the "black" employers, which most flagrantly violate Japanese labour codes and OT pay requirements, are foreign corporations? These are not Chinese or Korean companies, but well known Western MNCs.

On Sales Tax I am full agreement that the sales tax does nothing, but causes the rich poor gap in Japan to widen, eroding Japan's large middle class, arguably key to its social stability.

Austerity In the real world, spending cuts invariably mean that useful, beneficial programmes will take a hit. Political wrangling will lead to even more money channeled to worthless causes with powerful lobbies at the expense of important programmes in education and welfare. If the politician-bureaucracy-corporations troika were able to sensibly allocate resources, Japan will not have collapsing highways, roads and trains to nowhere today. Pork-barreling in this country is a no less tenacious practice than in any other Asian country. Even in the West, spending cuts in Greece and the UK have seen crucial programmes shut down in favour of more wasteful ventures. Austerity in the present Japanese context would almost certainly lead to a collapse of demand and derail the country's nascent recovery.

I was not schooled in economics in particular but these are things that actually happen in real life. In light of this I have been suspicious of an excessive reliance on economic theories.

@ANewAsia

Foreign Investment

UK no longer has its own auto industry because those companies couldn't compete. I'm not overly familiar with the Singapore situation, but competition in the auto industry is intense. The role of the government isn't to shield an industry from fair competition, or business realities. Protectionism is not getting people secure, well-paid jobs; nor ensure a healthy business environment.

While I agree, governments (the world over) make concessions to large-multi-nationals, foreign investment isn't inherently a negative thing.

I'm not advocating a big free for all, but, allowing companies to bring more jobs into the economy is a good thing. After all, Japanese businesses operate overseas as well, providing jobs, and revenue to the countries where they operate. More jobs aren't going to hurt an economy.

If, for example, a company wants to set up a business in Japan, why should it be barred from the economy? What good does it do to keep much needed revenue out of the market? I don't see the downside of more jobs.

Entrepreneuship

There are bad apples in every barrel. I don't think discouraging people from being more independent, and realizing their dreams is constructive. If a person has a good, well-paid job, with which they are happy, all the power to them. But, this archaic approach to worklife won't create new businesses, products or jobs.

People in Japan opt for the traditional worklife because that's what's been "sold" to them by the education system, and the government, not to mention Japanese corporations. Discouraging entrepreneurship, and/or, obstructing it serve only a small group of interests.

Japan, right now, has a very small entrepreneur class, many with great, feasible ideas, but job candidates won't take jobs with fledgling businesses because they been made too timid. Small and medium businesses are producing more jobs than many large corporations (some who have engaged in massive lay offs).

Yeah, there are "black employers", but there are many more who are willing to pay people for the work they do. This servitude to large, old corporations has led to just this situation. A nation with a very well educated, hardworking population, mired in economic stagnation.

I personally know people who are self employed, and run small businesses. It's tough, risky, but ultimately more rewarding. Denigrating people who take risks, and create jobs isn't fair. Entrepreneurship is an admirable practice; one that should be promoted, taught, and celebrated.

Austerity

I agree, governments traditionally don't handle austerity (or much else) very well. However, it makes no sense to raise takes to rein in the debt, and then accrue more debt. If you have a sky-high credit card debt, do you continue using it to buy things you don't need?

The sales tax may work for a year, and produce extra revenue to make interest payments on the debt, but without cuts in spending, that debt is going to continue to go up. The sales tax will only work if people are out spending more money on goods and services, but incomes now remain stagnant, and heavily taxed.

Borrowing more money, hiking taxes, printing money to devalue the yen: how are these things going to rein in the debt, or bring about prosperity? If one assumes Abenomics works, it will only result in, at most, 2% growth in 10 to 20 years. Abenomics strives not for prosperity but mediocrity (at best).

It's great that you view excessive reliance on economic with suspicion (I do as well). Direct that keen suspicion at Abenomics.