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To: regli who wrote (73319)	10/31/2006 8:24:25 PM
From: regli	Respond to of 110194

One more things that I found fascinating regarding Japan and its fiscal situation: In the 2001 Annual Report on Japan's Economy and Public Finance the following points were made at the beginning: www5.cao.go.jp "Overall Assessment of Japan's Public Finance Section 1 Expanding Budget Deficits Massive budget deficits have remained in Japan as government spending has far exceeded revenues. As a result, the government has been plagued with massive debts. This section reviews the state of budget deficits and considers the following points: (a) Since the collapse of the bubble economy, Japan's budget deficits and outstanding debt issues have been expanding considerably. The expansion in budget deficits and outstanding debt issues has resulted from slumping revenues and increasing spending caused by the prolonged economic weakness, frequent economic measures and increased social security costs. (b) Most of the present budget deficits are structural deficits that will not diminish even on a pickup in the economy. (c) If the present situation continues, Japan's public finance will collapse on an explosive increase in outstanding debts. (d) A prefecture-by-prefecture breakdown of per capita fiscal spending (benefits to residents) and tax payments (costs) indicates that inter-regional disparity has been widening since the early 1990s. ..." Interestingly enough, in the 2006 report everything is honky dory and the word deficit is not to be found in the whole report: The key sentence in the heading: Japanese Economy Heading for New Growth Era with Conditions for Growth Restored www5.cao.go.jp However, despite some improvements, the budget deficit is still at least 4% of GDP: oecd.org "... On a general government basis, the primary budget deficit has fallen from 6.7% of GDP in 2002 to an estimated 4% in 2006, with about half of the decline due to structural factors, and the rest accounted for by the economic expansion. " It looks like the Japanese under Koizumi learnt a key skill from American policy makers: Implement Orwell's Ministry of Truth and BS your way along and everything will be fine.