NO.033 Why did Miyazawa's fiscal policy of 100 trillion yen fail in the past? Say that something impossible has happened. “The sudden use of the Great Demon” was supposed to be in accordance with the principles of macroeconomics. However, "If it was done healthy." ・・・ Theme label: MMT. Pension government bonds. Keynes policy by the Bank of Japan's direct purchase of government bonds. These suit the principles of macroeconomics., Category label:macroeconomics,

Why did the Miyazawa Finance Minister's 100 trillion yen fiscal movement fail once?

I say that Miyazawa's fiscal move was supposed to be successful.

I have doubts about the government's economic policy.

Once in the era of Prime Minister Obuti, the Minister of Finance  Miyazawa  implemented a fiscal movement of 100 trillion yen every year for several years.

Why didn't the economic policy that was supposed to fit the macroeconomic theory succeed?

I say that Miyazawa's fiscal move was supposed to be successful. ... Miyazawa's fiscal policy was a policy that met the principles of macroeconomics. If Miyazawa's fiscal policy was being carried out correctly, the Japanese economy would have been a step away from deflation, and the Japanese economy would have realized another high growth again. The government's tax revenues would have expanded, and the government would have repayed its fiscal debt.

It should have been funny somewhere.

Let me point out one. Fiscal action of around 100 trillion yen means the government special demand of 100 trillion yen for industry. It was supposed to have been an explosive detonator of activation for the Japanese economy.

Even in the common sense, the economic activation effect was supposed to have been felt on the skin.

However, in reality, such economic revitalization effect did not occur at all. The fiscal move was not actually done. ... That is the conclusion.

I will give you some possibilities. After the issued government bonds were brought into the bank, the amount of the government bonds was added to the balance of someone's account.

If so, on the book, GDP would have grown by 100 trillion yen.

I will describe a sound approach. The Bank of Japan issues new Japanese banknotes and purchases 100 trillion yen of government bonds. The government makes public investments using the proceeds from the government bonds paid.

The total demand is the sum of the existing demand and the government special demand of 100 trillion yen.

For the industry, the government will buy 100 trillion yen worth of goods in addition to the social products.

The government's debt must eventually be repaid, but by then it must have brought about 100 trillion yen of special demand effects on the economy.

The effect was supposed to have been felt by the common people, too. However, there was no such effect.

When the industry produces goods, values ​​that were not present at the raw material stage should be created and added to the goods.

The industry can add the price of the value created and added to the product to the cost of the raw material and sell it.

If the total value of the value produced in the entire economy exceeds all costs including debt, profits will remain after debt repayment. I understand that it is economic growth.

This is called Keynesian policy. In the business book, Naoki Komuro introduced a case where Hitler's Nazi Germany implemented the Keynesian policy, restructured the German economy that was failing, and made it grow high enough to expand into a large army.

President Roosevelt in the United States heard that he made a public investment by having an asset holder buy the issued government bonds. I guess Hitler had the German Federal Bank make a new mark issue and purchase the issued government bonds.

Germany's national finances at that time were nearly dead, so there would have been no asset owners to buy such government bonds issued by the German government.

At the moment, the Bank of Japan is carrying out an inflation-targeted quantitative easing policy, but the idea is basically the same.

The Bank of Japan issues new Japanese banknotes and purchases government bonds, stocks and bonds that have already been issued.

An entity that purchases products with newly issued Japanese banknotes is not the government but those who sold government bonds, stocks and bonds to the Bank of Japan.

As I mentioned in the previous article, Abenomics was originally supposed to be the Keynesian policy I just mentioned. Prime Minister Abe has stated that "the government will carry out a fiscal move with the resources that let the Bank of Japan purchase government bonds directly."

Shortly after the Prime Minister's remarks, Abenomics replaced antidimensional monetary easing, an inflation-targeted quantitative easing policy.

The Keynesian policy should have an immediate effect if it is healthy. The effects of inflation-targeted quantitative easing policy should also be immediate.

If it has not been successful in overcoming deflation over six years, somewhere is strange.


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