> I think the key variable which is unknown is the Japanese
> situation. However, here too there is positive evidence,
> Japan is apparently spending 1/2 a trillion + dollars to
> bail their banks out and taking more "leadership" in their
> "sphere of influence".
Isn't one of the problems that Japan has already poured out a lot of money (lowered taxes, government investments etc.)?
I have read that extra government spending in Japan within the last year or so has been as much as 40 pct. of GNP. I mean: They can do so once and maybe two or three times, but they can't continue to do so, can they? And up to now it seems this public spending has only had a limited effect.
So it seems they face the dilemma of either pouring even more money after those already spent - and with which effect? - or letting whole chunks of banks, factories etc. go bust. The last option is a very dangerous one - but how realistic is it that they will be able to blow new life into it's economy by public spending?
And the next question, I think, is: What will the medium term effects be of this huge - even if it's insufficient, it's still huge - money-spending? Isn't it "just" going to add to future problems? If the basic problem is "overproduction", then speeding up the economy will just build up future problems, won't it?
> Its nice to see this executive committee of the
> ruling class as so scared.
Indeed. But still they act as if this is only a temporary problem: "Next year or the year after growth will go up again", seems to be what they were taught to say in their business schools. I just saw an interview with the Mexican president, who had no problems with predicting 3-4-5 pct. growth next year or the year after ...
Yours Jorn
-- Jorn Andersen
Internationale Socialister Copenhagen, Denmark IS-WWW: http://www2.dk-online.dk/users/is-dk/