Japan's Political Parties Screwing the Young
Consumption tax hike and reactor restarts a farce
July 02, 2012 JBpress
Japan has just passed a bill to raise the consumption tax to 10% by 2015. It's also looking very likely to restart its nuclear plants. Both of these developments show Japanese politicians' disregard for the young people of Japan, argues JBpress. But will the young care enough to fight back?
The way Japan's parliament is handling the proposed consumption tax increase shows that Japanese politicians treat the public as fools. If you look at what the three main parties--the DPJ, LDP and New Komeito--agreed on, and strip away all the bickering and haggling over trivial details, the truth starts to emerge.
In other words, they have agreed that whoever wins the next lower-house elections will reap the fruits of the tax increase. An estimated 13 trillion yen in new tax revenues will be available for the ruling party to dole out as it sees fit. And that party will even have the political cover of a mandate from the people.
"SAY NO TO NUKES AND NODA"〔AFPBB News〕
"Raising taxes while overpaying on pensions"
Why do we say they're treating the public as fools? These politicians have no interest in the people of Japan. They're only interested in gaining advantage in the endless games of musical chairs they play for political power.
For example, because of Japan's continued deflation, the government continues to pay more than necessary on pensions and other social security costs. The Ministry of Health, Labour and Welfare calculated that overpayments had reached seven trillion yen as of the end of last year.
If the current deflationary trend continues, Japan will continue to pay one trillion yen a year in social security more than it needs to pay. The social security system was created in an era of inflation and nobody factored in possible deflation.
When confronted with these staggering figures, the government just continues to say it will 'look into it.' It shows no interest in reducing the waste. Instead, perversely, it continues to champ at the bit for tax increases.
But it shouldn't surprise anyone. There's a clear reason. Politicians and bureaucrats prefer bigger, more powerful government. The source of political power is the ability to influence others, and the more power and money you have the more you can influence. The more bloated a government becomes, the more room there is for pork-barrel politics and for cushy, high-paying jobs for bureaucrats to "retire" to in the time-honored practice of amakudari.
When they debated raising the consumption tax did anyone even suggest reducing pension payments? If you are going to talk about reducing the burden on the next generations, reducing over-generous pension payments to the elderly is a logical starting point.
But this was not even considered. It makes us wonder whether Japanese politicians have any time at all for the young people of Japan.
One other thing that comes across pretty clear from the three parties' agreement is that they are all keen to flatter older voters. Japan's baby boomers, an important constituency for Japan's political parties, are beginning to retire and take their pensions. The elderly, in general, are far more likely to vote than younger people. No political party wants to upset them by cutting their pensions.
In short, the three parties' agreement is really an agreement to abandon young people. Are the young people of Japan really okay with this? That's what we want to ask.
The young people of Japan should at least have the right to propose a 5% reduction in pension payouts in return for the 5% increase in consumption tax.
The truth is that even if the consumption tax is raised, the current social security system will still collapse if the politicians continue with their 'money politics.' Young people are facing the prospect of having to pay more consumption tax in addition to their regular social security contributions, and then receiving much smaller benefits when they retire. This seems disgraceful to us.
"False logic that not restarting the plants is too expensive"
And then there's the restarting of Japan's nuclear power plants. Amid continued doubts over the safety of Japan's nuclear power plants, including concerns about the lack of earthquake-resistant command centers, the prime minister is apparently going to decide on whether to restart other nuclear power plants as well as Kansai Electric's Oi plant.
Since when has so much power rested exclusively with the prime minister? If there is an accident will his resignation solve the problem? History offers many examples of what happens to dictators after they step down, but a prime minister can't possibly be prepared to pay that kind of price.
The mainstream national dailies and the Keidanren, the Japan Business Federation, unconditionally support restarting the reactors. They argue that blackout worries and the cost of generating power from oil and natural gas will hurt the economy.
But wait a minute. Does this mean that more than a year on from the nuclear accident we still haven't sorted out alternative energy sources? This seems like negligence from the government and the power companies. Before any restart happens we are owed an explanation.
Young people are the most affected by the nuclear accident. They will have to live with its fallout (both metaphorically and literally) for many, many years. The full effects of the accident are not even fully understood yet.
In this too we see the government's abandonment of the young people of Japan.
The mainstream national dailies write that expenditures on oil and natural gas this year alone have cost the economy around three trillion yen. But how much did the nuclear accident cost the economy? And how much will the next one cost?
Nuclear fuel has to be imported from the U.S. On top of that, nobody in the world has figured out how to finally dispose of spent fuel, so we don't know how much that will cost. But those costs will be huge.
Sewage systems offer a good analogy. If you live in an area with a sewage system, you're supposed to pay sewage fees in proportion to the amount of water you use. In other words, you pay for the disposal. Likewise, for nuclear power, the reported cost of nuclear fuel isn't only the cost of importing the fuel from the U.S.; it should also include the cost of its processing and disposal.
In the case of nuclear fuel, the cost of disposal far exceeds the up-front purchase cost. But even though nobody knows what the final cost will be, many claim nuclear power is cheap.
In truth, editorial writers at big newspapers are all well aware of this. However, they choose to ignore it and clamor for restarting the reactors, claiming that not restarting the nuclear plants is too expensive.
Instead of clinging to nuclear power, investing in the development of new energy sources would create the need for investment in R&D. This would create demand for workers with young, flexible minds, thus creating jobs for the young.
It is often claimed that increasing taxes will help decrease the national debt, but this is false logic. Amid the few and small spending cuts that have been made, history shows that if you raise taxes during a period of deflation in which you have made almost no spending cuts, it could lead to a major recession.
Also, we cannot be sure that the tax increase will lead to increased revenues: there is a very real danger that total tax revenues will decline as a result of this tax hike.
A poor business environment would also hurt job prospects for the young.
Will the young people of Japan permit this farce to go on unchallenged? With their unprecedented ability to use the internet to organize and mobilize they have the ability to throw the bums out in the next election. But will they care enough to do it?
Japan's politicians have revealed their true colors. If ever there was a chance to change things, it's now.
