The huge cost of the coronavirus pandemic is upending Japan's seven-year experiment to rescue the economy from its debt timebomb, as recession ...
The huge cost of the coronavirus pandemic is upending Japan's seven-year experiment to rescue the economy from its debt timebomb, as recession fears prompt calls for"helicopter money" - unlimited spending bankrolled by the central bank.
Japan could issue even more debt, as economy minister Yasutoshi Nishimura has said the latest package won't be the last if growth remains in danger. The plan was to stoke the economy enough so companies reaped profits and paid more taxes. That, in turn, would let Japan reduce its huge debt burden without spending cuts.
As fiscal hawks lost clout, spending continued to balloon and Abe's administration pushed back the timeframe for meeting its target to balance the budget. "Under yield curve control, the BOJ can buy unlimited amounts of bonds if yields rise," said Kazuo Momma, a former central bank executive who is now an economist at Mizuho Research Institute."The current low-rate, low-inflation environment is a convenient one for huge government spending."
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