Hilarious: Japan’s PM Noda ‘Japan Must Heed Lessons Of Europe’

Hilarity of the Day: Japan’s PM Noda “Japan Must Heed Lessons of Europe” (EX-SKF, Jan. 16, 2012):

According to Bloomberg News, that’s what Noda said on January 14 after reshuffling his increasingly unpopular cabinet.

Mr. Noda, it is Europe and the rest of the world trying their best to avoid being like Japan, after having heeded the lessons of Japan, the one and only country in the whole world whose deficit to GDP ratio well exceeds 200%.

Noda’s lessons learned from Europe? Raise taxes.

From Bloomberg (1/15/2012):

Prime Minister Yoshihiko Noda said containing Japan’s public debt load, the world’s largest, is critical after Standard & Poor’s downgraded credit ratings on France, Austria and seven other European nations.

Europe’s fiscal situation “isn’t a house burning on the other side of the river,” Noda said on TV Tokyo Holdings Corp.’s program on Jan. 14. “We must have a great sense of crisis.”

Noda reshuffled his cabinet last week, aiming to win support for doubling Japan’s 5 percent national sales tax by 2015 to trim the soaring debt. S&P said in November Noda’s administration hadn’t made progress in tackling the public debt burden, an indication the credit-rating company may be preparing to lower the nation’s sovereign grade.

Japan’s government, which has enjoyed borrowing costs that are around 1 percent, wouldn’t be able to manage its finances if bond yields surged to 3 percent, Noda said last week. The country risks seeing a spike in government bond yields unless it controls a debt load set to approach 230 percent of gross domestic product in 2013, the Organization for Economic Cooperation and Development said on Nov. 28.

(The article continues.)

If the bond yields increase 200 basis points to 3%, Japan’s debt servicing would consume all of the government tax revenue, according to Kyle Bass.

Bloomberg’s article has IMF suggestion to Noda, which he may be very happy to oblige – raising sales tax to 15%. That should totally finish off the struggling Japanese, because it won’t be accompanied by the reduction in income tax:

The International Monetary Fund has said a gradual increase of Japan’s sales tax to 15 percent “could provide roughly half of the fiscal adjustment needed to put the public-debt ratio on a downward path.”

PM Noda and his gang are very eager to do the bidding of the international community at the expense of the citizens of Japan. That much has been known to many in Japan since he took office last September.

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