Perhaps Japan could be a lesson to Japan

February 6, 2009

From Gen, a NYT has an article about how Japan could be a lesson to the US about how not to create economic stimulus. 

 げんから、 アメリカは日本の過ちを繰り返さないようにと言うニューヨークタイムズの記事。90年代の不況から日本が脱出出来た理由は建設業界への投資ではなくて構造改革と銀行問題に立ち向かったことであった。

<p>In total, Japan spent $6.3 trillion on construction-related public investment between 1991 and September of last year, according to the Cabinet Office. The spending peaked in 1995 and remained high until the early 2000s, when it was cut amid growing concerns about ballooning budget deficits. More recently, the governing Liberal Democratic Party has increased spending again to revive the economy and the party's own flagging popularity.</p><p>In the end, say economists, it was not public works but an expensive cleanup of the debt-ridden banking system, combined with growing exports to China and the United States, that brought a close to Japan's Lost Decade. This has led many to conclude that spending did little more than sink Japan deeply into debt, leaving an enormous tax burden for future generations.</p>The amount of money that Japan wastes (debt money no less) on propping up the construction industry is absurd, perhaps the goal of turning Japan into one huge concrete block will be realized one day.  More construction also means more money to maintain the things that are constructed.  Would love to see this money spent on real restructuring, support for working parents, teaching skills so we can move the economy away from pouring concrete.


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