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...seats in the Japanese parliament's lower house, voters ended a half-century of nearly unbroken rule by the Liberal Democratic Party (LDP) - providing an unprecedented rebuke to the country's political élite, at the same time issuing a mandate for lawmakers with fresh ideas to address Japan's protracted economic malaise and growing societal ills. (Read "Will an Opposition Victory Rescue Japan's Economy...

Author: /time Magazine | Title: A Sea Change in Japanese Politics | 9/14/2009 | See Source »

...days for the new administration to draft a budget for the next fiscal year that doesn't increase the national deficit - now at 180% of GDP, the highest ratio among developed countries - but still provides funds for costly election-year promises. The deadline is all the more pressing because Japan's still anemic economic recovery could falter without the steady infusion of government spending...

Author: /time Magazine | Title: A Sea Change in Japanese Politics | 9/14/2009 | See Source »

...stab at stimulus includes annual cash handouts to families with children of $3,350 per child, free high school education, the elimination of highway tolls and a four-year freeze on Japan's 5% consumption tax. A balanced budget is out of the question for now, but the DPJ says it can help pay for additional programs by cutting $97.8 billion in "wasteful" government outlays...

Author: /time Magazine | Title: A Sea Change in Japanese Politics | 9/14/2009 | See Source »

...deficit spending "to demonstrate that they're fiscally responsible," says Gerald Curtis, a Japanese-politics expert and professor at Columbia University. Not everyone is convinced they'll succeed. Masaaki Kanno, chief economist at JPMorgan Securities in Tokyo, is skeptical that cutting wasteful spending will compensate for growing expenditures: Japan's aging population means social-security spending alone must expand by $10.7 billion annually over the next five years. "The DPJ will have to show people a consistent way to finance additional spending," Kanno says. "This has nothing to do with political ideologies. It's the reality of economic equations...

Author: /time Magazine | Title: A Sea Change in Japanese Politics | 9/14/2009 | See Source »

...Diversify Japan Inc. Japan must finally abandon the script it followed to become an industrial superpower. The global economic crisis has exposed the country's overdependence on its manufacturing-for-export model. GDP in the first quarter plunged a staggering 15.2% as demand evaporated for cars from Toyota, Honda and Nissan and for high-end electronics from Sony and Panasonic. Japan can no longer expect economic growth to be generated almost exclusively by a handful of powerful multinational manufacturers. Increased domestic consumption as well as investment in small- and medium-sized enterprises are needed to help drive economic growth. This...

Author: /time Magazine | Title: A Sea Change in Japanese Politics | 9/14/2009 | See Source »

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