September 19, 2004

BANG THE TAIKO SLOWLY:

Record 25 million Japanese over 65 (Japan Times, 9/20/04)

The proportion of elderly people continues to grow in Japan, with a record 24.84 million people, or nearly one-fifth of the total population, estimated to be aged 65 or older, according to a government report released Sunday.

The estimated number of people over 65 has risen by 550,000 from the previous estimate released in September 2003 to a record 19.5 percent of the overall population, an increase of half a percentage point.


Despite reforms, future looks grim without consumption tax hike (YOSHIO NAKAMURA, 9/20/04, Japan Times)
In the "Okuda Vision (Japan 2025)" report released in January 2003, Keidanren used a simulation to present the medium to longer-term prospects for Japan's fiscal and social security systems. We made it clear that the measures which would be needed to maintain the sustainability of national and local government finances -- including social security programs -- would involve cuts in public spending and a hike in consumption tax to the upper half of the 10 to 20 percent range.

During the roughly 1 1/2-year period that has since elapsed, a Cabinet decision was made requiring the government to cap government expenditures as a proportion of GDP and to aim for a surplus in the primary fiscal balance by the early 2010s. The Diet also enacted pension reform legislation earlier this year. In light of these developments, Keidanren has updated the simulation used for the report, and found, in short, that this series of reforms is still not sufficient to sustain our fiscal and social security systems and that further spending cuts and tax increases are necessary.

Posted by Orrin Judd at September 19, 2004 7:43 PM
Comments

America, too, has to cut benefits and raise taxes to cover the cost of caring for older citizens.

Or, they could just go back to work. Even if they just mopped floors and operated cash registers part-time at the closest greasy spoon, it'd help a lot.

Posted by: Michael Herdegen at September 20, 2004 2:58 AM

Michael:

No we won't.

Posted by: oj at September 20, 2004 7:25 AM

Isn't it possible that Japan is just a little
overcrowded and in the end the demographic downgrade (if the people can weather it out) will
produce a revival?

Posted by: J.H. at September 20, 2004 10:20 AM

No.

Posted by: oj at September 20, 2004 10:24 AM

Japan is drifting downward -- too much consumption, not enough production. They've chosen NOT to accept immigration to counter their birthrate drop.

The US is getting the immigration plus -- and the negative of too many Hispanics and (perhaps) too little assimilation. But the best shape of all G-8 nations. If we get ownership over retirement accounts, the US will soar, relatively, over the old -- but China and India merely need global free trade and limited gov't and they'll be two new superpowers. In 20 years or so.

Posted by: Tom Grey - Liberty Dad at September 20, 2004 12:38 PM

oj:

Do tell ?
Have you come around to the "R2D2 and C3PO rescue us" scenario ?
Even I only give that a 50% chance of occuring.

Absent a dramatic rise in productivity, how do you expect America to provide for Boomers without cutting benefits and raising taxes ?
Privatizing SS saves GenX retirements, not the Boomers', the bulk of whom will be retired in fifteen years.

J.H.:

Yes.
Japan will end up with a much smaller, but stable, population, in forty years or so.
Orrin has argued that Japan will have to allow immigration, to keep their economy running. Also, since "being Japanese" has more to do with race, than it does culture or geography, (the opposite of how "being American" works), real Japanese will become like the Maori, a minority in their own land.
Thus, Japan will cease to exist, replaced by faux Japan.
Perhaps that's what he meant by "No".

Tom Grey:

In China's case, it's the "limited gov't" that'll be the sticking point.
China may be a superpower in twenty years, but IMO the borders of China won't be as they are now; the Chinese coast and the Chinese hinterland may part ways.

Posted by: Michael Herdegen at September 21, 2004 2:14 AM

Michael:

We'll have enough younger workers, will reform the system and can carry more debt.

Posted by: oj at September 21, 2004 7:03 AM
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