The Patriot Post® · America: Lessons from Japan's Failing Economy

Stephen Moore: “Japan is suffering another economic free fall. Following a second quarter GDP decline of an annualized 7.3 percent, this last quarter the economy in Tokyo sank again by another 1.6 percent. … There are lessons here for U.S. policymakers if they are paying attention. Japan’s economic plunge coincides with the disastrous blunder by Prime Minister Shinzo Abe’s government to raise the nation’s sales tax from 5 percent to 8 percent starting in April. To offset the negative effects of the tax hike, the Japanese central bank has flooded the nation with paper money; the yen has subsequently fallen in value relative to the dollar. … The nation has massively increased government ‘infrastructure’ spending to try to bump up demand. … But the spending only exploded net government debt as a share of GDP, which is now above 140 percent. So to lower the debt, the Abe government enacted the tax hike on consumers, which has had the predictable effect of reducing family spending. … It wasn’t so long ago that American intellectuals were fawning all over Japan as the planet’s new economic superpower. … If anything good can come out of this calamity it is that other nations learn the lesson that Keynesianism is a fraud. So why does Washington keep trying it?”