Japan about to walk the plank – again – Bill Mitchell – Modern Monetary Theory
http://bilbo.economicoutlook.net/blog/?p=43251https://nam-students.blogspot.com/2019/11/2019930-101-httpsecon101.html
Japan about to walk the plank – again
利払い後。この注文の増税の規模が現実的かどうかという質問に戻ります。
しかし、日本政府は10月1日の締め切りに近づくにつれて、過去の売上税の履歴に明らかに敏感です。
直近– 2019年度予算案のハイライト–政府は、
過去の消費増税の3％の過去の経験に基づいて、さまざまな手段を動員し、増税が景気回復の傾向に影響を与えないようにあらゆる努力をします。
したがって、彼らは最後の2回の消費税増税が家計消費支出の大幅な減少を引き起こしたことを認識しています。
政府は次の推定値を提供しています。
1.消費税率の引き上げにより、収益は約5.2兆円増加します。つまり、非政府部門の現在の購買力を大幅に削減します。
2.このマイナスの影響を相殺するために、彼らは「無料の幼児教育」と「社会保障制度の強化」の分野で代償的な政策変更を実施することを提案している。
社会保障の変更は、「低所得の年金受給者」を対象とし、売上税の上昇から生じる「医療費の補償」を提供します。
これらの相殺は、約3.2兆円だけ家計に恩恵をもたらすと推定されており、継続的な財政変更になります。
3.合計すると、支出の推定収縮は2兆円になり、これは2018年の名目GDPの約0.4％です。
規模的には、これは重要です。
4.彼らはまた、短期的に約2.3兆円を注入する一時的な措置の範囲を提案します。
総合すると、政府は、5.5兆円の利益を提供するか、5.2兆円の購買力の損失に対する補償以上に相殺すると主張しています。
短期的には、経済成長への影響は小さいと予想されます。実際、この提案は増税のマイナスの影響を遅らせるだけです。
一時的な措置が終了すると、過去のように増税が行われます。
ですから、問題は、日本政府が財政状態を「統合」する必要があるという主張を受け入れることが賢明かどうかです。
答えは明らかに賢明ではないということです。
日本は自国通貨を発行し、財政危機に直面していません。日本政府が自国通貨で発行されたいかなる金融負債にも対応できない状況は決してありません。
OECDの主張はどうですか？
ここで、日本が主要な財政黒字に向かっていかなければならないという主張の不条理を見ることができます。
現実を考慮してください。
次の2つのグラフは、1980年から2018年までの日本のセクター別バランスを2つの観点から示しています。最初のグラフは、実際の残高を示しています。
このブログ投稿-週末クイズ-2019年9月7〜8日-回答とディスカッション（2019年9月7日）で、部門別残高の詳細な説明を見ることができます。
2番目のグラフは、平均的な外部バランス（GDPの2.51％の余剰）に基づくバランスを示しています-黄色の線-民間の国内バランス（灰色）と財政バランス（青色）の関係をより明確に示しますお互いに。
これらのグラフは因果関係については説明しませんが、国民所得の変化により、残高が会計の平等になり、残高間の関係が支えられることがわかります。
次の事実は、次の結論を導くのに役立ちます。
1.日本は、1980年以来、GDPの平均2.5％の対外黒字を続けています。
2.平均して、1980年以来、民間の民間部門はGDPの6.9％の全体的な貯蓄率を持っています。
3.日本における債務返済の「負担」は現在非常に低い。
債務返済の「負担」が今後数年でマイナスになる可能性が高いことも明らかになっています。
これは、古い債務問題が成熟するにつれて、負の利回り問題が債務返済全体の計算においてより支配的になり、ある時点で負担が負になるためです。
Project Fearは、財政赤字を削減し、消費税を引き上げなければならないと主張していることを考えてください。
日本は先進国の中でGDP比の公的債務総額が最も大きいという事実に関連して考えてみてください。
どの主流のマクロ経済学の教科書でこれを説明できますか？
回答：なし。
さらに、直近の財政赤字はGDPの約3.2％（2018年）であり、現在はわずかに低くなっているため、日本政府がOECDの助言に従って一次財政黒字を実行しようとした場合はどうなると思いますか再び？
1.消費税の引き上げは成長を損ないます。それは間違いありません。成長が不十分な支出によって制約されているとき、その問題を悪化させた政策は意味をなしません。
2.債務返済が負の領域に向かっており、これはさらなる収縮力（利息収入の損失）を表す。
3.非政府部門はGDPの約6.9％を節約し、外部の余剰は約2.5％である
現在のGDPレベルを維持するには、政府が約3〜3.5パーセントの財政赤字を抱えている必要があります。
民間消費支出の停滞を考えると、実際には財政赤字を増やす必要があります。
4.主要な財政黒字へのプッシュは、関連する歴史的パラメーターを考えると壊滅的です。
誰もがそれが合理的な考えだと思うだろうか？
それは、主流のマクロ経済学が制度の現実に関係なく盲目的にドグマを適用する方法を示しています。
結論
日本の大きな問題は、非政府支出の停滞です。
政府の資金調達の問題はありません。独自の通貨を発行します。
そして、非政府部門は現在、公的債務による収入の全体的な損失に直面しています。
政府は、これらの繰り返される売上税の引き上げによって「停止」が発生するストップゴー刺激行動が、日本での安定した成長や繁栄の促進に資しないことを学ぶ必要があります。
私は10月末に日本に滞在し、これらの問題について政府関係者や活動家とさらに話し合うことに熱心です。
今日はこれで十分です！
（c）Copyright 2019 William Mitchell。全著作権所有。
Japan is about to walk the plank again when it follows through on a previous government decision to increase the consumption tax by a further 2 per cent on October 1, 2019. That means it rises from 8 per cent to 10 per cent. The latest fiscal documents suggest the government is hyper-sensitive to the historical experience, which tells us that each time they have fallen prey to the deficit terrorists who have bullied them into believing that their fiscal position is about to collapse, consumption expenditure falls sharply and the government has to respond by increasing the deficit even further to compensate. But, notwithstanding their caution (as evidenced by some permanent and temporary spending measures to offset the significant loss of non-government purchasing power that will follow the consumption tax hike, the fact remains that the policy shift will be undermine non-government spending and growth and is totally unnecessary. Moreover, the main problem in Japan at present is the lack of spending overall – non-government consumption expenditure has not yet recovered from the last consumption tax hike in April 2014. So far from raising taxes, the data on the ground is telling us that they should be increasing the fiscal deficit. This is another example of a few conservative politicians, being told by unaccountable mainstream economists to introduce policies that will damage the material prosperity of the ordinary Japanese worker and their families. And when we consider that the time is approaching when the debt-servicing burden for the government is approaching negative territory, then the consumption tax hike looks even more ridiculous.
The Government has twice delayed this increase because of the push back – which came from within its own ranks as well as more broadly.
Recall, that the tax was first introduced in April 1989 – the rate was 3 per cent. They claimed at the time that the tax was necessary to fund welfare spending – in relation to its ageing society.
So from the outset, the justification for the tax was flawed.
In April 1997, in the face of mounting criticism from conservatives that the rising fiscal deficit, which kept the economy growing after the massive property collapse, the Government pushed the rate up to 5 per cent.
Economic growth fell sharply and the Government was forced to renew its fiscal (deficit) support for the economy. This dislocation sealed the political fate of the Prime Minister at the time.
The same flawed justification (ageing society) was used to propose pushing the rate up to 8 per cent in April 2014 and then 10 per cent in October 2015.
The second proposed rate rise was delayed because of the fear that further retrenchment in the fiscal stimulus would promote recessionary forces.
I have written about that several times – Japan is different, right? Wrong! Fiscal policy works (August 15, 2017).
The following graphs show two different perspectives on consumption expenditure in Japan over the period 1994 to the June-quarter 2019. The first indexes the time series at the March-quarter 2014, the quarter before the most recent tax hike was introduced.
The two sharp declines in consumption expenditure followed the tax hikes in 1997 and 2014. There is clear causality here – cut purchasing power and demand for goods and services drops.
The second graph shows the quarterly rate of change in consumption expenditure. The two largest negative spikes (in red) are the quarters after the tax hikes in 1997 and 2014.
If you look at the current period, consumption expenditure has not yet recovered from the last tax hike in April 2014. It is still 1.6 per cent below that previous peak (March-quarter 2014).
The problem is not that the Japanese government has a fiscal crisis on its hands but that overall spending remains weak. A consumption tax rise will exacerbate that problem.
But the pressure for further rate hikes is clear – the conservative forces are continually pushing the Japanese government to cut its fiscal deficit to store up capacity to deal with the future ageing society.
In the annual – OECD Economic Surveys Japan 2019 (released April 2019) – the OECD said that:
Achieving a sufficient primary surplus through the consumption tax alone would require raising the rate to between 20% and 26%, above the 19% OECD average.
Why?
To create a primary fiscal surplus.
Why?
To pay for the welfare demands of the ageing society.
So, once again, a poor economic policy choice is being motivated by an incorrect construction of a problem.
Please read my blog post – Australia – the Fourth Intergenerational Myth Report (March 5, 2015) and the linked blog posts cited therein – for more discussion on this point.
A primary fiscal surplus is an excess of tax revenue over spending net of interest payments. I will return to the question of whether a scale of tax hike of this order is realistic.
But the Japanese government is clearly sensitive to the past sales tax history as it approaches the October 1 deadline.
In the most recent – Highlights of the Draft FY2019 Budget – the Government notes that:
Based on the previous experience with the past consumption tax hike by 3%, mobilize a range of measures and make every effort to ensure that the tax hike will not affect the trend of economic recovery.
So they are cognisant that the last two sales tax hikes caused significant declines in household consumption spending,
The Government provides the following estimates:
1. The consumption tax hike will increase revenue by approximately ¥5.2 trillion. That is, it will reduce current purchasing power in the non-government sector significantly.
2. To offset this negative effect, they propose to implement some compensatory policy changes in the areas of “Free Early Childhood Education” and “Enhancement of Social Security System”.
The social security changes will target “low-income pensioners” and provide “compensation to medical fees” arising from the sales tax rises.
These offsets are estimated to benefit households by around ¥3.2 trillion and will be on-going fiscal changes.
3. So taken together the estimated contraction in spending will be ¥2 trillion, which is around 0.4 per cent of 2018 nominal GDP.
In scale terms, this is significant.
4. They also propose a range of temporary measures which will inject approximately ¥2.3 trillion in the short-run.
So taken together, the Government claims that it will provide ¥5.5 trillion in benefits or offsets to more than compensation for the ¥5.2 trillion in lost purchasing power.
The expectation is that in the short-run, the impact on economic growth will be small. In effect, the proposal just delays the negative impact of the tax rise.
When the temporary measures terminate then the tax hike will bite – as it did in the past.
So the question is whether it is sensible for the Japanese government to entertain the claims that it needs to ‘consolidate’ its fiscal position.
The answer is clearly that it is not sensible.
Japan issues its own currency and does not face a fiscal crisis. There will never be a situation where the Japanese government is unable to meet any financial liabilities issued in its own currency.
What about the OECD claim?
It is here that we see the absurdity of the claims that Japan has to move towards a primary fiscal surplus.
Consider the reality.
The following two graphs show the sectoral balances for Japan from 1980 to 2018 from two perspectives. The first graph shows the actual balances.
You can see a detailed explanation of the sectoral balances in this blog post – The Weekend Quiz – September 7-8, 2019 – answers and discussion (September 7, 2019).
The second graph shows the balances based on the average external balance (a surplus of 2.51 per cent of GDP) – the yellow line – to give a clearer depiction of the way the private domestic balance (grey) and the fiscal balance (blue) relate to each other.
These graphs don’t tell you about causality but we know that shifts in national income bring the balances into the accounting equality that underpins the relationships between the balances.
The following facts help frame the following conclusions:
1. Japan has run an average external surplus of 2.5 per cent of GDP since 1980.
2. On average, the private domestic sector has had an overall saving rate of 6.9 per cent of GDP since 1980.
3. The debt-servicing ‘burden’ in Japan is very low now.
It is also becoming clear that the debt-servicing ‘burden’ is likely to turn negative in coming years.
This is because as older debt issues mature, the negative yield issues will become more dominant in the overall debt servicing calculation, such that, at some point, the burden will become negative.
Think about that in relation to the Project Fear claims that it has to cut its fiscal deficit and hike its consumption tax.
Think about that in relation to the fact that Japan has the largest gross public debt to GDP ratio among advanced nations.
Which mainstream macroeconomics textbook could explain this?
Answer: None.
Further, what do you expect will happen if the Japanese government followed the advice of the OECD and tried to run a primary fiscal surplus, given that the most recent fiscal deficit was around 3.2 per cent of GDP (in 2018) and is now slightly lower again?
1. The higher consumption tax will damage growth – that is undoubted. At a time where growth is being constrained by inadequate spending, a policy that exacerbated that problem doesn’t make any sense.
2. With a debt servicing heading into negative territory that will represent a further contractionary force (lost interest income).
3. With the non-government sector saving around 6.9 per cent of GDP and an external surplus of around 2.5 per cent the government has to run a fiscal deficit of around 3 per cent to 3.5 per cent for the current GDP level to be sustained.
There is actually a need for an increased fiscal deficit given the stagnating private consumption expenditure.
4. Pushing towards a primary fiscal surplus would be catastrophic given the related historical parameters.
Where anyone would think that would be a reasonable idea?
It demonstrates the way in which mainstream macroeconomics just blindly applies its dogma without regard for institutional reality.
Conclusion
The major problem in Japan is stagnating non-government spending.
There is no government funding problem. It issues its own currency.
And the non-government sector is now facing an overall loss of income coming from the public debt.
The Government should learn that its stop-go stimulus behaviour – where the ‘stop’ is generated by these repeating sales tax hikes – is not conducive to stable growth or the advancement of prosperity in Japan
I will be in Japan at the end of October and will be keen to discuss these issues further with government officials and activists.
That is enough for today!
(c) Copyright 2019 William Mitchell. All Rights Reserved.
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