NewsHK
Against the backdrop of a sovereign interest burden that was already climbing, Japan is deliberately forgoing near-term revenue on the expectation that a 370 trillion yen public-private investment programme will generate enough growth to justify the cost.
The approach, linked to Sanae Takaichi, leans on stronger consumption as the core transmission mechanism.
Whether that growth materialises before the interest bill compounds further is the pressure this strategy cannot resolve in advance. Revenue now, growth later Japan is giving up revenue in the near term.
The premise is that a large enough injection of public and private capital will lift household consumption, which broadens the tax base over time and makes the fiscal sacrifice self-correcting.
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