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Thread: Japan Plans To Cut Spending, Could Run Out Of Money In A Month

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    Japan Plans To Cut Spending, Could Run Out Of Money In A Month

    Japan's government is planning to suspend some state spending as it could run out of cash by October, with a deficit financing bill blocked by opposition parties trying to force Prime Minister Yoshihiko Noda into an early election.

    The impasse in Japan's parliament has raised fears among investors that the world's third largest economy is being driven towards a "fiscal cliff", Reuters reported.

    "The government running out of money is not a story made up. It's a real threat," Finance Minister Jun Azumi told a news conference, making a last-ditch appeal for cooperation by opposition parties to pass the bill.

    "Failing to pass the bill will give markets the impression that Japan's fiscal management rests on shaky ground," he said.

    Unless the bill clears the current parliamentary session that ends next week, the government will start suspending or reducing some state spending to avoid running out of money for as long as possible, the finance ministry said.

    Noda's ruling Democratic Party passed the deficit-financing bill through the lower house on Tuesday. But the opposition boycotted the vote, signalling the bill has little chance of clearing the opposition-controlled upper house.

    Subsidies to local governments and state-run universities will be cut by half from the originally planned amount until the bill passes parliament, the finance ministry said.
    Japan plans to cut state spending, could run out of money in a month - Telegraph

    pm noda, it is interesting, is the expression of an upstart revolutionary outsider sentiment that is redolent in many ways of some pungent japanese tea flavor---reduction of a too big and corrupt and crony bureaucracy, a taxpayer and consumer constituency, civil service reform, a cut in the gas tax

    noda is a kickboxer with a black belt

    from sacto to springfield to washington dc, from brussels to athens to tokyo, with a lucky little flyover country between, there is no avoiding it

    there's not enough rich to tax to stay it a day

    what went wrong?

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    Re: Japan Plans To Cut Spending, Could Run Out Of Money In A Month

    another opportunity to see how austerity works ... or doesn't
    while being able to sit on the sidelines
    we are negotiating about dividing a pizza and in the meantime israel is eating it
    once you're over the hill you begin to pick up speed

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    Re: Japan Plans To Cut Spending, Could Run Out Of Money In A Month

    How is this different than when the GOP held the US hostage over the deficit ceiling and it resulted in the S&P downgrade?
    PeteEU

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    Re: Japan Plans To Cut Spending, Could Run Out Of Money In A Month

    Nothing to do with not enough rich people to tax; everything to do with obstinate members of parliament and political gamesmanship. I would say I dont miss that, but it happens here too. Just seems to be the way of the world. Any leverage must be used as a sledgehammer against the opposition regardless of real world consequences.
    panties.

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    Re: Japan Plans To Cut Spending, Could Run Out Of Money In A Month

    not enough money on earth to tax our way out

    Buffett Rule would barely dent debt - CNN.com

    what went wrong?

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    Re: Japan Plans To Cut Spending, Could Run Out Of Money In A Month

    Quote Originally Posted by justabubba View Post
    another opportunity to see how austerity works ... or doesn't
    while being able to sit on the sidelines
    Waiting until the last minute to enact austerity always hurts more. As it should.
    “Tyranny is defined as that which is legal for the government but illegal for the citizenry.”
    ― Thomas Jefferson

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    Re: Japan Plans To Cut Spending, Could Run Out Of Money In A Month

    Roughly 43% of all Japanese government revenue goes just towards debt servicing, they have the second worst debt to GDP ratio in the world (and getting worse), their stock market has been generally falling for decades and they have a rapidly aging population.

    Japan is a mess.

    http://www.bloomberg.com/news/2012-0...epression.html

    That's what happens when you virtually abandon fiscal discipline for long enough.
    Last edited by DA60; 09-02-12 at 04:43 PM.

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    Re: Japan Plans To Cut Spending, Could Run Out Of Money In A Month

    I'll never understand why all these countries jeopardize their existence just to live on the credit card a little bit longer. Its an addiction.
    "I have never understood why it is "greed" to want to keep the money you have earned but not greed to want to take somebody else's money." -Thomas Sowell

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    Re: Japan Plans To Cut Spending, Could Run Out Of Money In A Month

    Quote Originally Posted by DA60 View Post
    Roughly 43% of all Japanese government revenue goes just towards debt servicing, they have the second worst debt to GDP ratio in the world (and getting worse), their stock market has been generally falling for decades and they have a rapidly aging population.

    Japan is a mess.

    Japan

    That's what happens when you virtually abandon fiscal discipline for long enough.
    Yea but there is a small issue there... most of that debt.. is to themselves... to their own citizens.
    PeteEU

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    Re: Japan Plans To Cut Spending, Could Run Out Of Money In A Month

    Quote Originally Posted by Bigfoot 88 View Post
    I'll never understand why all these countries jeopardize their existence just to live on the credit card a little bit longer. Its an addiction.
    Its the American way of life. We all drank the cool aid spun by American economic theorists... some more than others.

    But saying that, it is not like Japan has been in decline the last 20 years despite its high debt.
    PeteEU

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