A trap for the financial policy without financial resources

In the prime minister's general-policy speech on Aug. 7, although Prime Minister Keizo Obuchi made a political commitment for economic recovery with his political life, it was not clear whether he can get a good result in spite of his enthusiasm.

Former Prime Minister Kiichi Miyazawa who took office of Finance Minister was Finance Minister in Takeshita government, and he was the person concerned who decided to introduce Consumption Tax. From the standpoint of Miyazawa who reigns over Finance Ministry as a former bureaucrat, for example, an idea of Consumption Tax reduction will be regarded as a wild argument for an economic stimulative measure.

Regarding with consumption tax reduction plan, opinion unity proceeds in the opposition parties, on the other hand, under Finance Minister Miyazawa it must be very few possibility that the government makes a proposition for Consumption Tax reduction.

According to a report by Finance Ministry, it is clear that general revenue defect (deficit) in 1997 was 1,617.4 Billion Yen. Naturally it is covered by issuing deficit-covering bonds. Importantly it means that money which Japan can use as a flow had reduced.

Cumulative deficit only in government is already over about 240 Trillion Yen. Additionally every year the ration for repayment of the principle and interest added to the general expenditure reached about 20%, and it is continuing to oppress other budgets.

For economic recovery, if budget expenditure increases, it must be a discussion how budget resources should be. But without the domestic discussion, after all, Japan must conclude a method of the cover by issuing deficit-covering bonds

By tax reduction and change of austerity public finance, do they really give a big effect for future economic recovery? If Finance Minister Kiichi Miyazawa cannot recover economy Obuchi government will come to an end. Faction reorganization for budget acquisition Future struggles for power in politics for little budget and acquisition and maintenance for the related rights will be clear for people.

As a good sample to concisely show characteristics of Obuchi Cabinet, we should pay attention to personnel arrangement for persons who admit scattered budget in minister posts in charge of public works budget such as Construction Minister and Minister of Autonomy.

A vast majority of people are strongly disappointed as they know more and more struggles for power within Liberal Democratic Party (LDP) through news reports.

Before the House of Councilors election in the other day, The Keidanren (the Federation of Economic Organizations) clearly shows a support for LDP.

Although they faced an ironical result which is a crushing defeat of LDP, each company group is continuing attention to politics for a survival after the financial Big Bang.

In the background for budget acquisition, there is a fact that domestic big business groups support and cooperate such as Mitsubishi Group for Mitsuzuka faction, Mitsui Group for Miyazawa faction, Sumitomo Group for former Watanabe・Nakasone faction and Japanese general contractors group for Obuchi faction.

How they strengthen their supports and cooperations will decide a destiny of faction (political group).