Idiot wind, blowing every time your move your mouth,
Blowing down the backroads heading south,
Idiot wind, blowing every time you move your teeth,
You’re an idiot babe,
It’s a wonder that you still know how to breathe.
Idiot Wind, Bob Dylan
Sometimes I get tired of doing all the heavy lifting. So welcome to an occasional feature in which you get to do it for me! Here’s an “article” from The Telegraph, which I believe once used to be a semi-serious, if comically Conservative, newspaper (remember them) in the UK. Tell me what’s wrong, after the bio, with the following (link to the full article at the headline). Or you could tell Mr Pascoe directly at his contact details below:
Thomas Pascoe worked in both the Lloyd’s of London insurance market and in corporate finance before joining the Telegraph. He writes about the financial markets. His email is email@example.com and his Twitter address is @PascoeTelegraph
The world’s third largest economy is in crisis. That, in itself is not news. The world’s largest economy is also in crisis, as is its second, as is…
What is newsworthy is that, having tried and failed with every other option, the Japanese government may be taking a remarkably novel approach. It appears as though they are going to try to spend close to what they receive in taxation. The Keynesian consensus is coming to an end in Japan, although not before it has wrought enormous damage to one of the world’s great economies.
“The government running out of money is not a story made up. It’s a real threat,” said Japan’s finance minister Jun Azumi on Friday. Opposition parties in Japan are blocking a deficit financing bill which would allow the government to continue to drive its debt levels above 200pc of GDP. If the opposition holds firm, the government has threatened the unthinkable – it will spend less. Tax rises are also on the table, although the doubling of sales tax to 10pc will not come fully into force until 2015.
However, Japan’s horizons have been blighted by cloud for much of the past two decades. If anything, those clouds are now blackening. The long-term impact of the Fukushima explosion, in terms of public health, is anyone’s guess. The clean-up work undertaken in and around the plant since the explosion has been exceptional. However, there is every chance that the generation coming to maturity in the next two decades may be blighted by significant levels of incapacity, hampering the economy and requiring even greater state spending.
The Japanese may have arrived at the idea of moving towards a balanced budget both 20 years late and by accident, but it offers them a chance to consolidate and restore order to the public finances. At a time when public appetite for government debt has fallen to a seven-year low, reducing borrowing is not just the sensible option, it’s the only one left.