beyond gridlock, and into the twilight zone...

where nothing ever gets done

Japanese need to wake up and realize that these old geezers can't see past their own noses and don't give a rats ass about their own society. At least Noda is trying to get things done for the good of the country instead of for the good of the fat cats.

Simply pathetic.

S

What a mess! At first, the increased consumption tax was to go toward helping the old folks of Japan, such as putting tax money into their social security payments. Then comes along the Liberal Democratic Party and they want to use the money in welfare projects. Then Ozawa enters the picture and says "no" to the consumption tax. I think these anti-consumption tax politicians don't want to see the senior citizens of Japan getting any of this money. I think the politicians want some of that money to line their pockets with.

Meanwhile, the senior citizens of Japan see their social security payments drop more and more. Mine have been axed six times already ... five by the LDP and once under Minshuto's reign, thanks to the LDP's and Komeito's stubborn policy of doing nothing.

So when the LDP regains power in the next election, whenever it'll be held, what will they do? They are not saying for sure. Do they have a plan or not? The only thing the LDP & Komeito and the other parties do is just oppose, oppose, oppose. But do they give answers about what their intentions are? No.

They are just sitting around waiting to grab more of our hard-earned money that is dealt out in taxes in some form or another.

Too bad the senior citizens of Japan don't take to the streets like the anti-nuclear reactor protestors do ....

SpideyAug. 08, 2012 - 03:58PM JST

At least Noda is trying to get things done for the good of the country instead of for the good of the fat cats.

You mean the fat cats that are in the part below?

edojinAug. 08, 2012 - 04:06PM JST

At first, the increased consumption tax was to go toward helping the old folks of Japan, such as putting tax money into their social security payments.

How does that help old folks? They already get more than they need, and considering some of them triggered the 1980s bust, more than they deserve. Old people tend to have a house that is already fully furnished, so the only expenses are food and utilities. They get discounts on utilities already, and food isn't that expensive when you have all the time in the world to make it.

This tax is a horrible idea, the last time the tax was increased Japan went from recovery to recession within 6 months, because every increase in cost without increase to paychecks (not social security checks) means an equal amount of savings people must make to get by. Adding 5% tax is the same as reducing consumer spending by 5%, which means business revenues go down 5% and profits down much more. Japan relies mainly on corporate taxes (42% on profits), so every cut in profits means LOWER total tax revenue, not higher revenue.

Fight squabble and argue and dont pass the tax bill, S&P and Moodys will see this as instability and japan's inability to reduce its debt level thus down grading japan and its yen, resulting in the yen crashing and exports being more affordable around the world. This will increase production manufacturing job security and employment.

Exporters will begin to recover as the economy enters this new boom and everything will be hunkydory again, so long as it lasts another 5 or 10 years thats all I need out of it (i'll be retiring) and then they can sort out the political and economic mess they have created.

Fight n squabble ya Buggers please.

My prediction is that he gets the tax hike. They all know they need money to continue. One way or another, it will come from the people.

@ExportExpert

That's an interesting line of "reasoning".

At least is makes more sense than the twilight zone three-ring circus beyond the mist curtain.

Anything that weakens the Yen would be welcome, and could indeed have a more pronounced effect in improving the economy than anything happening behind the mist curtain (a pun I've just come up with for "Kasumigaseki").

How does that help old folks? They already get more than they need, and considering some of them triggered the 1980s bust, more than they deserve. Old people tend to have a house that is already fully furnished, so the only expenses are food and utilities. They get discounts on utilities already, and food isn't that expensive when you have all the time in the world to make it.

Guess you don't know many old people. There are thousands trying live on less than 50,000yen/month. Never heard of discounts on utilities, we don't get them? We make all our food and still spend 75,000yen/month? Old people need to spend more on health care and medicines.

basroil ... surely you don't live in Japan. I know a lot of elderly people who are just scraping by. Yes, there might be some who have extra money, but not many. In my area there are a lot of people like me ... watching their social security income cut year after year and wondering how we can get by on our reduced retirement funds. Believe me, it's not so rosy ...

I forgot to mention ... if you are paying into the Japanese social security system ... then what decisions come from the government affects you, too. If you want something awaiting you when you retire, you had better hope that politicians stand up for the old folks ... 'cause if you're headed in that direction somewhere down the road, say 10, 20, 30 or more years, then hope that wiser heads in government are working in your favor ...

Political Opportunism is all this is.

The LDP supported the consumption tax increase before the DPJ considered it. The DPJ wanted to raise consumption tax, but they didn't want to do it so quickly after winning a majority out of fear of being confused with the LDP.

The LDP supported the measure in the lower house, but now they are balking because it helps them politically now that the DPJ is falling back into disarray.

There is no compromise on the terms of the legislation. There only seems to be plays on power.

edojin, one of the biggest mistakes anyone can make is to become reliant or dependent on any form of state welfare, whether it's called national pension, disability, or unemployment. Regardless of whether some of your income was taken from you via tax, any money you get was taken from others. That's literally "robbing Peter to pay Paul." And it's also why socialism fails. The "safety net" becomes a "safety hammock", or worse, a "safety crab-trap". Charity comes from the heart, but social programs come from threat of confinement.

Regarding the sales tax increase, each and every increase takes money from private individuals and is siphoned through the bureaucratic morass and squandered by the dithering idiots called politicians. The taxes impoverish those struggling to make ends meet and discourage entrepreneurs or private business owners. The result of raising the sales tax will be a further depressed economy and stagflation. A little more bloodletting may very well bleed the teetering economy bonedry.

edojinAug. 08, 2012 - 04:47PM JST

surely you don't live in Japan. I know a lot of elderly people who are just scraping by. Yes, there might be some who have extra money, but not many. In my area there are a lot of people like me ... watching their social security income cut year after year and wondering how we can get by on our reduced retirement funds. Believe me, it's not so rosy ...

I have stated many times I live in Hokkaido. The food prices here tend to be higher than some other places, and even so I rarely spend over 40000 yen/month (including occasional nomikai and weekly outings), and utilities are under 10000yen. It was stated here in this forum that the average government pension (social security) is over 80000 yen/month, so where do the other 30k go? If you mention a major city with large rental fees, I will tell you that the working class has no reason to support that stupidity, and that there are plenty of cheaper places to live.

zichiAug. 08, 2012 - 04:41PM JST

There are thousands trying live on less than 50,000yen/month. Never heard of discounts on utilities, we don't get them? We make all our food and still spend 75,000yen/month? Old people need to spend more on health care and medicines.

You can buy enough food for two people for less than 60000 a month even in expensive places. As for health care, it's already subsidized enough. Paying 30k a year for 2/3rds coverage is pretty generous already.

I know people from both ends of the scale.

And, yes, it is fairly easy to survive on little money for food if you shop wisely, but rent and utilities can kill you.

Got to agree with Cletus.

My electricity bill alone is 4.000Yen, add in the rest and .....

Adding in gas, water, Internet(Ip-Phone don't do NTT) and I am close to or over 15.000 easily. And I am not scrimping as I need the PC on 24/7. Granted no aircon just a fan at my work-desk.

basroil

You can buy enough food for two people for less than 60000 a month even in expensive places. As for health care, it's already subsidized enough. Paying 30k a year for 2/3rds coverage is pretty generous already.

yes, and you can live on rice balls but if you want to stay healthy and live a long life you'll need lots of good veg, fruits.

People pay into the health care system all of their working lives but also currently pay 30% of health care. Still better than what my ageing parents are paying over in Florida.

I have stated many times I live in Hokkaido. The food prices here tend to be higher than some other places, and even so I rarely spend over 40000 yen/month (including occasional nomikai and weekly outings), and utilities are under 10000yen.

On another post you stated you were paying high power charges as well as 2000 yen/month transmission charge. Utilities, water, gas, power is probably about 10,000 yen/month.

The gov't pension is about 60,000 yen/month plus company pensions if they have it but many people were self employed.

basroil you must live like a rat then, my tepco alone is 13,000yen for 3 people this month

@edojin

Too bad the senior citizens of Japan don't take to the streets like the anti-nuclear reactor protestors do ....

Many older people have been protesting about the reactors, maybe they could just move onto pensions like they did in the UK?

@basroil

and utilities are under 10000yen

Well obviously if you're living in Hokkaido ! Someone in Hokkaido mentioned recently they'd like a biit of heat up there...

Rather than us taking a tax hike, I think I would prefer Noda take a hike himself.

While no one likes a tax hike at least Noda was making an attempt at doing his job. I'm not sure a tax hike will help with these fools in government, but it is a whole lot better than doing nothing (assuming it doesn't go straight into the amakudari fund).

I'd like to know what plans the other parties have for ensuring Japan's future......

but it is a whole lot better than doing nothing

How so? It never has been before. Every single time the consumption tax has been raised, the economy tanked even more. What makes you think it will be any different this time. No, it is not better, not a whole lot and not even a bit. How about cutting down the number of sleeping diet members and thus releasing that money first? How about actually looking at ways to be more efficient before causing people to pay even more and spend even less?

(assuming it doesn't go straight into the amakudari fund).

That is a huge assumption.

So....what are the other parties doing?

So....what are the other parties doing?

Erm, you realize that the LDP was the party to come up with this idea in the first place right? It does not matter what party came up with this, it is a bad idea and not the first thing that should have come out of Noda's bag of tricks to attempt to fix things. Why punish the public first when other cost cutting measures have not even been considered? Aren't things bad enough already?

Raising taxes will push harder on destructive deflation. With less money to spend there will be less jobs and less money to spend. Perhaps basroil the entire population will be living on 40k yen a month or less. It looks to me that the Japanese government is flying the economy into the ground. What happens when there is not enough money to pay pensions? The worry now is destructive deflation and not inflation.

So.................what are the other parties doing again?

So.................what are the other parties doing again?

P A R T Y I N G large.

A shrinking workforce and a chronically stagnant economy have weighed on Japan’s tax base, where public debts have bloated to levels unseen elsewhere in the industrialized world.

Well, part of the issue with chronically stagnant part is that every time the country was about to recover, it increased consumption tax and fell again. In the late 80s when the first law was established, the country went from 7% growth to 0% growth in five years (after having recovered from the shock in the early 70s), then again in 97 GDP fell at the same time that the law was voted. Considering we are currently in the process of recovering from not only the 2008-2009 dip, but the earthquake as well, I don't even want to know how far down GDP will go unless there is some sort of miraculous worldwide recovery that helps Japan absorb the damage.

So basroil, what would you do with the seniors that worked hard for their entire lifes? They paid into the pension plan and for a crappy pension, 40 years to get this crap. So what would you do with them? Do not know how you live on 40k a month? The cheapest one bedroom apartment in Okinawa was 20k a month, then add food, electric..AC..phone. Remember many seniors can not take the heat. I would say 60k a month is a very low lifestyle.

YuriOtaniAug. 09, 2012 - 12:42AM

Nobody ever said they had to live in Okinawa, or Tokyo, or anywhere else.

And while some do in fact not get anything else, many have no need for the extra money. If you were to lower the average, but make it dependent on personal wealth, it can easily manage everyone that needs it without extra money. After all, it should be a social security, not a social pension.

On the other hand, a consumption tax will affect the poor MUCH MORE than the well off. If the old people were really using all that money from pensions on spending, they would need to get 5% more simply to keep up with the tax. The current plan is to pay for the current rates with a new tax, so all the proponents are arguing for lower purchasing power by ignoring the effects of the very taxes they propose.

And that ignores the primary effects, like forcing an entire generation down. Many entry level job holders won't be able to afford things that their parents took for granted, since living costs will increase, purchase power will decrease, and a likely economic slump will make those two far worse.

basroil, they worked HARD for that meager pension. My point is most places cost a lot more than 40k for a single room aparto. 20 k is what is charged for a very crappy 1 room aparto in Okinawa in Koza. No parking for that price. The only way you spend so little is another is providing the quarters. Second, you can not have much of a life. So you want to relegate seniors to what? Remember they paid into the system on the promise of a retirement from the government. About how much you spend, 20k yen comes out to 667 yen a day for food. Your numbers do not add up. Anyhow if the government stops pensions, we will have seniors starving to death. Maybe not at first but the savings will only last so long. Then what?

About the new tax, people will just buy less and so the amount collected will not double. This will have the effect of more job losses. The people who lose their jobs will spend less which will cause more people to lose their jobs. It is possible people will just put off buying luxury items like new TV, etc. The government might actually collect less money as consumption decreases.

basroil Aug. 08, 2012 - 04:16PM JST How does that help old folks? They already get more than they need, and considering some of them triggered the 1980s bust, more than they deserve. Old people tend to have a house that is already fully furnished, so the only expenses are food and utilities.

More than 40 percent of those receiving welfare are elderly. Close to 1 in 4 of the households in Japan have no savings. Many are children of parents who are unemployed, don’t have steady work or are temporary employees. The number of welfare recipients is over 2 million. The best thing for Japan to do is allow more educated immigrants into the country to provide labor for needed services. Japan would require dramatic changes in immigration law, as well as dramatic changes in thinking. Without it, the growth of future tax revenue would be very difficult.

They paid into the pension plan and for a crappy pension, 40 years to get this crap.

State pensions were never intended to support a high standard of living, or any kind of living. They were concieved with a more modest aim: a safety net to prevent serious poverty in an age of nuclear families.

Part of the problem in developed countries is that people's expectations have outgrown what pensions can realistically supply. If you've worked all your life, then you should have saved, and used the money to pay off your mortgage and cover other expenses by the time of retirement. It's called "financial planning." If you didn't bother to plan, then well,...that's not really the state's problem.

JeffLee Aug. 09, 2012 - 06:45AM JST. If you've worked all your life, then you should have saved, and used the money to pay off your mortgage and cover other expenses by the time of retirement. It's called "financial planning." If you didn't bother to plan, then well,...that's not really the state's problem.

You can say the same thing about U.S., but the reality is half of the marriages in U.S. end up in divorce and you have to divide the assets. The divorce rate in Japan is also increasing. If you have kids, in most cases, the father has to pay for the child support until certain age. The broken family is very expensive and you lose 10 to 20 years of potential savings and investments. , If you are a middle age person who is going through this, it's really hard to make it up.

Old people tend to have a house that is already fully furnished

Home ownership rate in Japan is around 60%. You'd have to show that the working population were mostly in rented accommodation for the elderly to 'tend' to own their own homes. Some do. Many don't.

one of the biggest mistakes anyone can make is to become reliant or dependent on any form of state welfare, whether it's called national pension, disability, or unemployment.

The pension is not 'state welfare' (unless you're the unemployed wife of a sarariman.); it's a contract where people paid in on the understanding that when they retired they would receive. Granted the state pension isn't enough to live on and most people would need either another pension scheme or personal savings/investments to finance their retirement, but there is still a huge difference between a pension and welfare.

Paying 30k a year for 2/3rds coverage is pretty generous already.

Yes it would be - if it existed. The 均等割 part of the premium alone is more than that, as is the basic charge per household. Then add in the extra calculated from all these fine houses the old folk supposedly own, and you're talking a fair bit for someone making do on less than ¥80,000 a month. Not to mention that medical costs tend to increase as a person grown older, so the two-thirds (10% for those over 70 and not earning) payable also goes up in real terms.

Nobody ever said they had to live in Okinawa, or Tokyo, or anywhere else.

You do realise that everyone has to live somewhere? What do you want to oldies to do, stand in the sea until the waves wash them away? YuriOtani's 20K a month is very cheap compared to the rest of Japan.

it should be a social security, not a social pension.

I don't think you get to decide what it should be. And it is a pension, not welfare.

If you've worked all your life, then you should have saved, and used the money to pay off your mortgage and cover other expenses by the time of retirement. It's called "financial planning."

Yeah, yeah, everyone and his dog is a financial wizard. The reality is that people work hard just to stay afloat, and life tends to mess about with the financial planning. 'Bonuses' that were supposedly an integral part of the salary and promised regular increments don't appear, kids who you planned to send to state school end up having to go private, people get ill, jobs are lost, marriages break down, politicians and bankers wreak havoc with the economy. For many people, paying into the pension scheme was the best they could manage by way of 'financial planning'.

cleo, sfjp330, otani, do you really think that making everyone that doesn't make much pay an extra 5% will help? You keep avoiding the issues of lost purchasing power by the very people you claim it will help. And that is before factoring the negative externalities including the economy tanking and non-retirees having much less purchasing power.

And if you look at http://www.jcer.or.jp/eng/pdf/Worawan.pdf , the benefits don't stop until you earn over 480000 yen a month, or ten times higher than the amount people here are bickering about. Also, health care costs are capped at 37500 even for higher income elderly, much lower for state pension only.

Interestingly, that link also shows a fairly linear relationship between time and pension costs, even as the economy stagnated. At that rate, we expect 60 trillion yen in pension payments, which is enough to give everyone in the country about 500000 yen a year, which is 40k/month... so just how do the 17% of the people manage to get an average of 230k yen/month if the system is not broken enough that your issues are not irrelevant?

YuriOtani wrote above about cheap rentals in Okinawa. While living there I once hit the skids and shopped around for a cheap place to live. As YuriOtani wrote: " ... most places (in Okinawa) cost a lot more than 40k for a single room aparto. 20 k is what is charged for a very crappy 1 room aparto in Okinawa in Koza. No parking for that price. The only way you spend so little is another is providing the quarters. Second, you can not have much of a life."

I checked out such cheap apartments around the island, and I was stunned by what I saw. No way could I, and I am sure you, the reader, could live in one of those places.

The same holds true here in Tokyo today. In the States we call such places flophouses, but here there are similar places that rent for under 50,000 a month. I couldn't live in them ... but I have Japanese friends (all are single, both men & women) who do. And some of them are headed into retirement with probably what will be cheap social security funds. Will they be able to live in even such poor conditions then? I sure can't answer that one ...