Three guesses and the first two don’t count
Posted by ampontan on Thursday, August 19, 2010
UNIVERSITY OF TOKYO economics Prof. Ihori Toshihiro writes in the 18 August edition of the Yomiuri Shimbun:
There are more public employees at the sub-national level than at the national level. Some of those employees, such as drivers for state-operated transport and janitorial and sanitation workers, have higher salaries than their counterparts in the private sector. Reducing the personnel costs of sub-national public employees would result in savings estimated to range from five to 10 trillion yen.
The largest support group for the Democratic Party is Jichiro, the All Japan Prefectural and Municipal Workers Union, and for them, this is a sanctuary. How will the government proceed?
1. Bring public sector salaries in line with private sector salaries. Some estimates have the public sector earning 40% more than the private sector in Japan.
2. Raise taxes—including the consumption tax, income taxes on higher earners, and the inheritance tax—during a deflationary period and pretend that using it in “the right places” will create growth.
Chief Cabinet Secretary Sengoku Yoshito, the de facto head of the Kan administration, is also the leader of a Diet group affiliated with Jichiro.
Which do you think the DPJ government will choose?
Based on the impact that choices made by people with a similar political philosophy have had on the American economy, how much worse will economic conditions in Japan then become?