The Economy Will Definitely Get Better

In response to the once-in-a-century global economic crisis, countries around the world are making national efforts to tackle the challenges. In the United States, the Congress has approved an economic stimulus bill, which President Barack Obama has signed into law so that it takes effect immediately.

The US economic stimulus package has a total value of $787 billion (\72.5 trillion), of which about 64% is expenditure increases and about 36% tax cuts. A “Buy American” clause is included, though it will be applied in a manner consistent with America’s obligations under international agreements. Jobs for 3.5 million people will be created.

I have no doubt that this package is going to have the effect of supporting the economy from the second half of this year. Of the expenditure increases, which account for 64% of the package, $120 billion goes to the improvement of bridges, roads, and the electricity grid; $38 billion goes to the “Green New Deal” and so on; and $193 billion goes to establishing a safety net, including the expansion of health insurance and unemployment insurance. Of the tax cuts, which account for 36% of the package, measures center on tax relief for workers, but there are also tax reductions for the purchase of new cars and homes, tax relief enabling companies to immediately write off more of their investments in equipment, and tax credit for education expenses. At last this package is going to be implemented.
At the same time, the finance ministers and central bank governors of the G7 major industrial countries gathered in Rome on February 13 14 and issued a joint statement pledging that their countries would actively adopt fiscal measures to expand domestic demand and create employment; confirming that their countries were taking steps, including exceptional measures, to stabilize the financial market; expressing concern about the emergence of protectionism, which only exacerbates the downturn and prevents economic recovery; and stressing that appreciation of the Chinese renminbi was desirable.

The G7 finance ministers and central bank governors showed their stance of seeking to contain the economic crisis, and from now on each country will take urgent steps to enforce measures and achieve results. They also stated clearly that the global economic stagnation would continue through 2009, so the situation remains unpredictable.

However, if the major countries unite and act swiftly to overcome the global economic crisis, I am sure that results will definitely be achieved. In the crisis that occurred last century, countries did not act in unison, and the result was a world war.

The United States has begun to act resolutely, too. For this article I referred to the Asahi, Yomiuri, Nikkei, Sankei, and Tokyo Shimbun newspapers. Although their commentaries all welcomed the US stimulus package, they never failed to add some negative remarks as well, like “The package does not offer prospects for effectively overcoming the crisis,” “America’s traditional dole-out policy,” or “Obama’s fiscal policy is walking a tightrope.” When an otherwise good article turns negative toward the end, in many cases the reader understands it to be a total denial. With regard to the latest economic crisis, the style of newspapers in reporting economic and corporate information typically has pushed the public to the depths of despair. This has led consumer behavior into the negative zone. It is a very serious matter.

I firmly believe that as countries begin to address the real economy, the effects in supporting the economy will definitely begin to appear in the second half of next year, and the economy will start moving toward recovery. The US economic stimulus bill, the actions and statements of President Obama, the meetings of the G7 and G20, and so on should go down in history as epochal events. At the same time, we should never forget the evil of the vulture funds and so on, and we should always remember that neither states nor companies must be allowed to have dominance.

All the same, the lack of tension in Japanese politics is deplorable . . . .