[Japan] Summit on the State of Japanese Economics White Paper

[Suvorov]

Press Release Ministry of Finance 3-1-1 Kasumigaseki, Chiyoda, Tokyo, Japan 〒100-8940 For the past week, members of Prime Minister Ryūtarō Hashimoto's cabinet, Ministry of Finance personnel, and leading academics, lead by Minister of Finance Hiroshi Mitsuzuka, met to discuss the state of the Japanese economy as well as plans to improve it. At the conclusion of their meeting, the cabinet members published a white paper on the state of the economy as well as their plans. A summary is provided below. Summary Causes of the Stagnation: Excessive loan growth quotas dictated on banks by the Bank of Japan caused banks to disregard borrower quality and lead to rapid inflation of the economy and creation of a bubble economy Reactionary policy of the Bank of Japan starting in 1989 to rapidly deflate speculation by sharply raising inter-bank lending rates caused the bubble to crash immediately Current Drags on the Economy: Unsustainable, over-leveraged banks backing unprofitable firms, i.e. "zombie banks" and "zombie firms" continue to exacerbate and prolong the crisis Lack of desire by firms to invest and grow their businesses. Most are opting to pay down liabilities rather than continuing to grow Lower consumer demand for goods compared to the previous decades Suggested Plans of Action: Consolidate the Banking Sector and cease bailing out Zombie Banks Fiscal Stimulus to encourage economic activity Lifting the ban on defense exports Beginning large-scale defense purchases to stimulate the industry domestically Issue bailouts in key industries to ensure the corporations continue to invest to grow, rather than paying off their liabilities Increase liquidity within the economy Privatization of some public industries Encourage public consumption through "tax free" holidays for certain industries as well as public service announcements. Secret: The contents of this white paper are the product of many months of existing research and plans from economists and members of the LDP party. The government held this summit and waited a week after taking office to give the appeance of working quickly on the nation's issues.

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