A textbook answer to Japan’s economic problems

Look, Malcolm might not be the worst economic manager in the world: Japanese Prime Minister Shinzo Abe to unzip $33bn on welfare. The Japanese economy has never recovered from its stimulus program of the 1990s, and despite its twenty years of failure, the addiction to public spending just keeps getting worse.

Japanese Prime Minister Shinzo Abe will increase spending on ­social programs and raise the minimum wage as he tries to jump-start the flagging economy ahead of an election next year.

Mr Abe said on Thursday the government would give cash handouts to the elderly poor, and build childcare and aged-care ­facilities to help people enter and stay in the workforce, as part of a stimulus package expected to cost at least ¥3 trillion ($33 billion).

He hopes to revive an economy that has slipped into recession for the second time in two years, heightening scepticism about whether Abenomics will succeed in generating sustainable growth.

Why should anyone be sceptical? They’re just stimulating demand, just like the textbooks say they need to do.

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