How will "earthquake reconstruction" affect household finances?

[mostakimvip04]

There has been talk of abolishing child allowances and raising the consumption tax as a source of funds for earthquake reconstruction, but we should first decide what we want to do and then think about how much we need and how to secure the funds. I visited the disaster area in early April after the earthquake, and I can't see how reconstruction from this point will change even if we can free up several trillion yen by rearranging the budget or raising the consumption tax.

Rather, we should make Tohoku a base for innovation in remove background image order to revive Japan. Specifically, we should build a model city for clean energy in Tohoku and encourage companies seeking a stable supply of electricity and those likely to be affected by a Tokai earthquake to relocate their production bases there. Not only would this create many jobs, but it uld also allow the massive amount of corporate internal reserves, which have increased by 100 trillion yen over the past decade to a total of 250 trillion yen, to be used for reconstruction purposes. The Ministry of Economy, Trade and Industry, which has completed its original role of fostering industry, should be relocated to Tohoku and take on the responsibility of revitalization as the Ministry of Reconstruction.

So what about the source of funds? I think the best thing to do would be for the government to borrow money from the Bank of Japan, using the approximately 70 trillion yen in U.S. Treasury bonds held by the Bank of Japan as collateral, and have the Bank of Japan underwrite the bonds on a one-time basis in an emergency. The Bank of Japan's underwriting of government bonds was originally used by Takahashi Korekiyo, who served as Minister of Finance seven times from 1913, to escape the Showa Depression. It was later abused by the military as a magic mallet to raise war funds, leading to financial collapse, and is now prohibited by Article 5 of the Financial Law. However, a proviso to the same article states, "This does not apply if there are special circumstances."

The recent earthquake disaster can truly be described as a "special event," so this taboo tactic will be used only once. Since the economy is already in a deflationary state, there is a deflationary gap of about 20 trillion yen, and nearly 20 trillion yen was lost in the earthquake disaster, so hyperinflation will not occur immediately. Of course, it will not directly damage our household finances. As long as the U.S. Treasury bonds used as collateral are not sold, the U.S. government should be okay with it.