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| Phto: A Kobe City official delivers a leaflet explaining about the Japanese government's cash handout to a homeless living in a shack in Kobe, western Japan, Tuesday, March 3, 2009. | ||
Cash back from the government?
Stupid, wasteful and ineffective -- and a shameless attempt to woo voters, many Japanese say.
Prime Minister Taro Aso is touting a one-time cash handout of 12,000 yen, or about $120 per person, as the centerpiece of a stimulus package to revive the world's second-largest economy, mired in one of its worst slumps since World War II.
But polls show that most Japanese oppose the idea -- though many confess they'll take the money anyway.
They argue that most people will just save the money, not spend it. Others say it's a shortsighted plan that exacerbates the government's ballooning budget deficit. Some call it a ploy to boost the plunging popularity of Aso and the ruling Liberal Democratic Party.
A survey last month by the Yomiuri, the nation's biggest daily newspaper, found that three-quarters of the 1,087 respondents disapproved of the cash payouts. In a similar survey by the Asahi newspaper, nearly two-thirds wanted the government to scrap the scheme.
The widespread repulsion seems driven largely by disgust with Aso and a perceived lack of leadership at a time of crisis, experts say. Aso ranks among the country's least popular leaders since World War II with approval ratings edging toward single digits. Elections must be held by September.
"The (ruling party) just thought ... wave the money in front of their noses, and they'll come running," said Jeff Kingston, a contemporary Japanese history professor at Temple University in Tokyo. "I think they underestimated the depth of anger from the people about the government's inability to provide credible leadership and a credible recovery plan."
Japan can hardly afford another misstep. Jobs are disappearing and companies are seeing deep red as the global financial crisis takes a particularly heavy toll on this export-driven nation. Last quarter, the economy shrank at its fastest pace in 35 years.
A spokesman for the prime minister acknowledged the public criticism of the handout but reiterated that while many people may not agree with it, that won't stop them from pocketing the cash.
"We believe that a significant portion of the population will be appreciative once they receive the money," said Osamu Sakashita, Aso's deputy cabinet secretary for public relations.
He added that the chief aim of the measure is to help households meet immediate economic needs. The government expects some macroeconomic impact, though there are no official projections, Sakashita said.
After dancing around the issue for weeks, Aso told reporters Monday that he and his Cabinet will take their share of the payout.
"I will use it immediately to help stimulate consumption," he said.
Experts are doubtful about the economic impact as well.
At best, the cash handout will lift consumption temporarily in the second quarter and boost gross domestic product by 0.1 or perhaps 0.2 percentage point, said Masamichi Adachi, senior economist at JP Morgan Securities in Tokyo.
He estimates that a quarter of the cash will go toward new spending. The rest will go straight into savings accounts.
In contrast, a survey conducted last summer by the Washington-based National Retail Foundation showed that American consumers had spent or planned to spend 46 percent of $105.7 billion in rebate checks distributed last year.
Under Japan's 2 trillion yen ($20.4 billion) plan, every resident -- including foreign residents -- would receive 12,000 yen. Children under 18 and seniors over 65 get 20,000 yen, or about $200.
The plan was approved by lawmakers but remains in political limbo, with the opposition-controlled upper house holding up related legislation needed to fund the payouts. If the upper house rejects the bill as expected this week, the more powerful lower house, controlled by the LDP, can push it through with a two-thirds majority.
By Tomoko A. Hosaka (AP)
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