That's it. He did it. Japanese prime minister Yoshihiko Noda has got to go. He's finished his political career by stating that Japan must fix her debt problem by doubling the Sales Tax by 2015. He's finished his political future by saying that.
And he did it on a nationally televised TV program. What a twit!
According to a survey: (whose results I don't believe for a second) 57% of the public oppose raising Sales Tax (trust that there's no one in their right mind would would support a doubling of their taxes - so the real numbers are much higher) and Noda's cabinet's support has dropped to 29%.
Since Noda became prime minister, he had been staying under the radar pretty much since the last guy, can't even remember his name now, you remember? The guy who was prime minister during the earthquake and after the Fukushima disaster?... His wife hated him and everything?...
Ohmura Kon!... Usually can't remember this guy's name either...
Oh, no. Now, I've done it to myself. I can't remember. The Japanese prime ministers keep changing every two weeks so I can't remember their names. What was it? Wait a second. I'll ask my wife...
... a moment later...
No good. She doesn't remember either. I know! I'll look it up! Kan! That's it! Naoto Kan! What a loser.
Now, we have a guy named Yoshihiko Noda and I'l bet you a donut most of you don't know what he looks like.
Japanese prime minister Yoshihiko Noda. Remember the face, he'll be gone by Autumn.
Anyway. Pardon me. Excuse the silly levity. I think it is needed at this time. Why? Because this idiot Noda has gone on a TV show on TV Tokyo channel 7 and actually stated in public that he wants to double our Sales Taxes! No kidding.
For even thinking that, he's got to go.
Prime Minister Yoshihiko Noda said containing Japan’s public debt load, the world’s largest, is critical after Standard & Poor’s downgraded credit ratings on France, Austria and seven other European nations.
Europe’s fiscal situation “isn’t a house burning on the other side of the river,” Noda said on TV Tokyo Holdings Corp.’s program on Jan. 14. “We must have a great sense of crisis.”
Noda reshuffled his cabinet last week, aiming to win support for doubling Japan’s 5 percent national sales tax by 2015 to trim the soaring debt. S&P said in November Noda’s administration hadn’t made progress in tackling the public debt burden, an indication the credit-rating company may be preparing to lower the nation’s sovereign grade.
Japan’s government, which has enjoyed borrowing costs that are around 1 percent, wouldn’t be able to manage its finances if bond yields surged to 3 percent, Noda said last week. The country risks seeing a spike in government bond yields unless it controls a debt load set to approach 230 percent of gross domestic product in 2013, the Organization for Economic Cooperation and Development said on Nov. 28.
Why, oh why, don't any of these Japanese politicians ever come up with a new idea for fixing the debt problem? Here's a novel solution: How about CUTTING GOVERNMENT SPENDING!!!
Here's the deal, Noda, since you are too busy to bother to learn anything about how the economy works, let me explain it to you: As I said, the government cannot continually keep taking money from the productive part of society and giving it to the nonproductive part of society. If you take money from Peter to give to Paul - or, in this case, from Taro to give to Takayuki - that distorts the market and allocates money into parts of the economy that wouldn't work if it weren't for these misallocations.
One day, someone has to pay for taking the money from Taro to give to Takayuki - like today, that's why we're in the financial mess we're in. If you increase taxes, the slow economy will get slower, and people's spending will drop in direct relation to the increase in taxes. It's a proven fact: If you raise taxes by 5% the corresponding decreasing in public spending will be 5%. Why? Because people have a certain set budget to spend on household goods. Just because you raise taxes by 5% doesn't mean mom is going to be able to pay an extra 5% for groceries. No! The amount of groceries she buys will go down by 5% in order to cover the extra taxes. It's very simple math.
Asahi News reports:
According to calculations made by Dai-ichi Life Research Institute Inc., the scheduled hike of the consumption tax rate to 8 percent in April 2014 will mean that a family of four with an annual income between 3.5 million and 4 million yen will pay an additional 72,270 yen in consumption tax, while one with an annual income between 5 million and 5.5 million yen will pay an additional 81,408 yen.
If the sales tax rate is raised to 10 percent, the additional burden, depending on annual income, will increase from between 40,000 and 100,000 yen.
Amazingly, these simple third grade mathematics seems to be incomprehensible and comes as a complete surprise to all Japanese politicians and politicians the world over whenever and wherever taxes are raised.Also, Mish Shedlock tell us an increase in taxes will cause the yen to skyrocket in value and destroy the export economy of Japan. Japan's debt is already nearing 230% of GDP.
If Japan starts printing money, that will cause massive inflation.
The only choice is to cut government spending.
Since, Noda is incapable of that, I suggest that Japan will continue to kick the can down the road (until it can't anymore) and that Noda will be forced to resign this year. May I finally make a New Year's prediction?
Current Japanese prime minister Yoshihiko Noda won't last until the end of 2012. Good riddance.
Cutting government spending and taking the pain now is Japan's only hope. The sooner we do it, the better off the country will be.
Any politician the world over who thinks doubling taxes is the answer to our problems will be out of a job... As s/he should be.
