News the Stars Bring Today

Well, I guess, someone on the Obama team must have tipped the Messiah off to “the Lost Decade of Japan,” because he referenced it in his Op-ed on WSJ. However, I think he may have failed to do even a preliminary research on the Internet about it, because, from what I can see, his team is making some huge mistakes. Maybe his first call should have been to Junichiro Koizumi, former Prime Minister of Japan (2001-2006)

Now, if he had read John Makin of A.E,I.org analyzing the “Lost Decade of Japan”, he would have read “it would have been far better to have reduced tax rates and allowed households to employ the increase in disposable incomes as they saw fit. Investment incentives would have helped as well, since part of the aftermath of the stock market boom was a collapse in private investment following the excessive buildup that occurred in the 1980s. Also, the need to move production facilities abroad grew as the economic environment in Japan deteriorated and deflation strengthened the yen, making goods produced in Japan too expensive in world markets.”

Makin went on to say that the biggest policy mistake in Japan, during that time was in 1997 when the government raised its”consumption tax from 3 to 5 %. Apparently they also discovered that the fiscal stimulus package was wasteful focusing on public works projects.

Furthermore, Mr Makin pointed out that a fiscal stimulus package should not be more that 1% of the GDP. Now according to CIA.gov the US GDP is 14.7 trillion dollars. It doesn’t take much of a mathematician to figure that the fiscal stimulus package just passed is more like 5-6 % GDP.

Unemployment now is at 7.2%, which is not as high as the unemployment rose between 1975-1986, according to Ed Morrissey at Hot Air. Sometimes, during that period, it was as high as 10%.

Again, Ed Morrissey at Hot Air emphasized that during those years, the US government pushed investment and cut taxes, not massive public works and was successful in recovering the economy.