The Impact Of Japanese Aging On "Andouble Economics"

"There is no solution to this structural problem: the government has a huge budget deficit, but the only way for older people to spend more is to increase public spending on them." First, Kumano Yingsheng, chief economist of the DLRI, chief executive of the Industrial Bank of China.

In the fourth quarter of 2014, Japan staggered out of the "technological recession", but consumers were still entangled. In April last year, the consumption tax rate suddenly increased from 5% to 8%, which brought a burden to consumers. At the same time, when Abe was once in power, the Japanese yen fell more than 40% against the US dollar, and the rise in import prices also exacerbated the deterioration of the economic situation.

Data released last week showed that household consumption fell by 6.1% in January this year, which is the tenth consecutive decline in the index, marking Japan's longest losing streak since the global financial crisis. Meanwhile, total retail sales also fell by 2% - the first decline in 7 months.

　　 Japanese elderly: High prices The greatest victim

Among all the consumer groups in Japan, the elderly are the group with the largest expenditure reduction. "Ordinary Japanese are suffering from the weak yen." SekiObata, an associate professor at the school of business, said, "the elderly with fixed pension is the most vulnerable group because their income is unlikely to increase."

Through right Government data In Kumano, it is found that whether the elderly can afford their own expenses or the need to tighten their belts depends on their ability or willingness to work. In 2014, 37.8% of households without labor remuneration reduced their spending by 1.5% - and almost all (95%) were older than 60.

On the contrary, those who are over 60 years of age but still get some income from their work are willing to use their own funds. For example, in 2014, the consumption of business owners increased by 6.9%, while those of non entrepreneurs increased by 1.8%.

At present, 50% of 65~69 years old Japanese have labor remuneration, and 25% of the elderly over 70 years old are paid. Nearly half of them are self-employed.

Because the total population of Japan is sliding to a financial alert level, they can not continue to work forever. At present, 1/4 Japanese are over 65 years old. According to the Japanese government's estimate, this proportion will increase by 30% by 2033. This will bring great restraint to the Japanese government.

In order to care for the elderly, the higher tax rate also inhibits consumption expenditure and economic growth, but if it does not increase taxes, it will only increase the debt burden of Japan. At present, Japan's debt burden is as high as 231.9% of GDP, ranking among the highest in the world.

The increase in consumption tax rate in April last year was intended to help pay for social security expenditures for the elderly, but that may not be enough. Economists warn that the consumption tax rate will be raised again in April 2017 - as the first tax rate has seriously damaged the economy, the second increase has been postponed from the original planned October 2015 - only to drag Japan into recession.

In view of the fragility of the economic recovery, "I do not think Prime Minister Abe will raise the consumption tax rate again," he said. "It remains to be seen whether he will admit that he can not reduce the budget deficit as well."

　　 To raise the consumption tax: Abenomics "Helpless" action

In October 1, 2013, the Japanese government decided to increase the consumption tax rate from 5% to 8% from April 1, 2014. On April 1, 2014, April Fool's day, the Andouble administration raised the consumption tax rate on schedule.

In fact, raising the consumption tax is the helpless result of "Andouble economics". After taking office in December 2012, Andouble, who failed to stimulate the economy for a long time, launched a more radical stimulus policy. However, due to the limited effect of long-term expansion, it not only failed to bring the ideal economic growth rate to the Japanese government, but left behind a huge deficit and debt burden.

Meanwhile, with the increasing proportion of the elderly population in Japan, the social security burden of the Japanese government in the areas of pension and medical care is becoming increasingly heavy. Japanese national debt, which has long relied on national household savings to buy and digest, is also difficult to continue to issue in large numbers because of the close balance of Japanese family financial net assets to the size of government debt. As Andouble economics calls for the expansion of fiscal expenditure, it is the Andouble administration's most feasible solution to raise the consumption tax to fill the deficit of the Treasury.

However, Japanese society has mixed opinions on the excise tax. At that time, according to the Japan economic news, after a tax increase, a "four family" in Japan could add nearly 70 thousand yen a year. According to the Japanese "Chinese guide" reported that, because Japanese companies rely heavily on the domestic market, in addition to banks in Japan's top fifty enterprises, nearly 2/3 turnover is from the territory, will certainly be subject to the impact of higher consumption tax rate. The Japanese auto industry predicted that sales could drop by 15% in that year after the consumption tax rate was raised. Now, the negative impact of the excise tax on the Japanese economy is emerging.