Shinzo Abe’s effort to restart Japan’s long-stalled economy took another step forward yesterday with the announcement of a 10.3 trillion fiscal stimulus plan (that’s about $100 billion) paired with renewed talk of monetary easing:
Mr. Abe also reiterated pressure on Japan’s central bank to make a firmer commitment to stopping deflation by pumping more money into the economy — a measure the prime minister says is crucial to getting businesses to invest and consumers to spend.
“We will put an end to this shrinking, and aim to build a stronger economy where earnings and incomes can grow,” Mr. Abe told a televised news conference. “For that, the government must first take the initiative to create demand, and boost the entire economy.”
Given the track record of Japan’s LDP and past fiscal stimulus efforts I think it’s reasonable to believe there’s going to be a lot of pork and waste in this package. But what Abe seems to be showing throughout his brief second tenure as prime minister is what Ben Bernanke wants called “Rooseveltian Resolve.” He’s determined to use every channel available to him—whether that’s currency depreciation or deficit spending or expectations-targeting by messing with the Bank of Japan—to get things moving. It’s exactly the kind of spirit the rest of the world needs to learn from.