Warning for CA: Japan’s tax increases sparked recession

Warning for CA: Japan’s tax increases sparked recession

Shinzo AbeJapanese Prime Minister Shinzo Abe just called for a snap election under their parliamentary system. We’ll soon see if voters affirm his tax-increase policies, which were supposed to restore strong growth but instead slammed the country into another slump.

Due to high taxes and regulations, and faulty monetary policy by the Bank of Japan, the country now now is halfway through its third “lost decade.”

This affects California because Japan is the world’s third (formerly second) largest economy and imports billions of dollars of our state’s exports, while also investing here.

Japan’s tax-increase recession also is a warning to California. Unions and others are seeking to put tax increases, beginning with a continuance of Proposition 30‘s $7 billion a year, on the Nov. 2016 ballot.

Already, despite California supposedly being “back,” it still has the fourth-highest unemployment among the states. It seems to be doing well only because the Federal Reserve Board pumped up the money supply, lifting the boats of all states.

But with the Fed now apparently ending the good times — “removing the punch bowl,” as economists say — a recession could strike. If that happens, the $20 billion California deficits could return with a vengeance and the state, ill prepared to thrive because of its anti-business climate, could say “Sayonara” to prosperity.

Meanwhile, Abe announced the second phase of his tax increases was delayed 18 months, but that Sword of Damocles still hangs over the heads of Japanese businesses and workers.

9 comments

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  1. LetitCollapse
    LetitCollapse 18 November, 2014, 16:46

    Japan’s going down. And taking us with them. Do you know that Japan’s GDP to dept ratio is about 250%!!! HAH! 🙂 Ours is bad enough at just over 100%. You see, Japan has to play nice with the rest of the world. They have long memories. The last time they tried to flex their muscles the US surrounded their island and cut off their oil supply (needed for economic survival) so they had to do something and suddenly we got Pearl Harbor. The rest is history. But your US history books generally won’t tell you the other side to the story. But it’s true. So now Japan has become a US puppet and has bankrupted their nation in the interest of the global good. HAH! IOW’s they took one for the gipper. But being the 3rd biggest economy in the world, when they take the fall it’s going to result is a HUGE mess worldwide. I think they’re the BIGGEST US debtholder. About a trillion dollars worth as I recall. When they sink …… what do you think happens to us????

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  2. NTHEOC
    NTHEOC 18 November, 2014, 16:46

    Ok DOOMERS, what is it? Are we Detroit or Japan now??

    Already, despite California supposedly being “back,” it still has the fourth-highest unemployment among the states.
    ——————————–
    Ya,but we still have the most Millionaires!!!

    a recession could strike.
    ——————————–
    Lol, and so can a Earthquake!

    Reply this comment
    • LetitCollapse
      LetitCollapse 18 November, 2014, 22:33

      How much longer before you retire with that fat pension, NTHEOC? 15 years? Good luck with that, man. You need to do some deep analysis on the economic and fiscal situation in Japan. That country is about as deep in the hole as they could possibly get. Debt to GDP ratio – 250%!!! HAH! They are toast, dude. Toast! And when that fiscal tsunami hits we ain’t far behind. If you got 15 years to go IMO you’re a day late and a dollar short, NTHEOC You’ll be lucky to see 20% on the dollar of your purported ‘entitlements’. You see, it’s much easier for the gov to change the laws and screw you out of your entitlements than it is to pay your pension benefits when the treasury is flat broke! You’re on the tail end of the Boomers, NTHEOC. By the time you get to the front of the line the Boomer will have already spent your share of the loot. That’s the way PONZI’s work, dude!!! 😀

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  3. Ulusses Luhaul
    Ulusses Luhaul 18 November, 2014, 18:31

    Doom….doom….kaboom….

    Whacky soothsayers give us a break already…..you’re wrong always, lose every election.

    When will it sink in?

    Reply this comment
  4. Queeg
    Queeg 18 November, 2014, 20:21

    But Sutter is cute!

    Don’t sweat the small stuff.

    Reply this comment
  5. LetitCollapse
    LetitCollapse 18 November, 2014, 22:56

    Weren’t the stooges great? I used to run home from school to catch them on the RCA 15 incher. Curly was always my fav. He was so cool. Moe used pull him around the room by his nose holes with the claw end of hammer and Curly would always take it in stride. What a mensch. The entertainment the kids have today is nothing compared to what we had at their age. No wonder the K-12 schools are an intellectual wasteland. The comedians back then were the greatest. Milton Berle, Steve Allen, Sid Caesar, Rodney Dangerfield, Richard ‘The Flame’ Pryor, Jackie Gleason, Red Skelton, Flip Wilson, Gene Wilder, Mel Brooks, Andy Kaufman, Dan Ackryord, Bill Murray, Rickles, Carlin, Jack Benney, George Burns, Tim Conway, etc…. Man alive….those were the days. I feel so sorry for kids nowadays. The movies suck. The comedians suck. The music sucks. All they got left are their stinkin’ iPods and video games!!! I never see them playing touch football or kick the can in the streets anymore. I guess it’s just another sign of the decline.

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  6. LetitCollapse
    LetitCollapse 19 November, 2014, 00:21

    The nobel laureate Paul Krugman was egging this joker ABE on to even print more fiat money and to tax more!!! They called it “Abenomics” HAH! I guess Paul wanted Old Abe to increase his debt to GDP ratio to 500% versus 250% – which is BY FAR the largest debt to GDP ratio on the globe. Now their economy is contracting because the purchasing power of the yen is diluted and the people don’t have extra money to spend due to the higher taxes!!! HAH! Still Krugman says because Abe didn’t do enough printing and taxing!!!! HAH!!! Where did this dude get his nobel laureate? From the inside of a crackerjacks box??? HAH! Eventually the house of cards come down. And NONE of them will take responsibility for their FAILED policies and the crash to end all crashes. When the next crash hits all reserves are GONE!!! They’ll have to print tons of dollar to bail out the Wall Street crooks and the dollar will implode! And watch them blame it all on Bush!!!! 😀 😀 😀

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  7. LetitCollapse
    LetitCollapse 19 November, 2014, 00:38

    I was wrong. China holds about $1.3 trillion in US treasuries. Japan is right behind with about $1.2 trillion. But what happens if Japan goes into a nose dive? Well, they got to sell some of those treasuries to save their butts which causes the yields to soar which forces the US to spend more to cover the interest due which adds greatly to our deficit which increases our total debt. Like I told you before….if the interest rates go over 6% (which is a HISTORICAL NORM) we’re cooked. Put a fork in us. Do the damn math. By the time the big ball drops we’re going to have over $20 trillion in fed debt. What’s 6% of that? That’s your annual interest payment. Now, what percent of the total budget would that be???? LOL!!!! Enjoy life today, folks!!! Eat, drink and be merry!!! The honeymoon is about to come to an end!!! Maybe y’all can get into the soup kitchen business! The demand will be HUGE!!! LOL!

    Reply this comment
  8. LetitCollapse
    LetitCollapse 19 November, 2014, 07:55

    Okay, folks. I’ll do the math for ya. The deficit for the current fiscal year is projected to be about $565 billion. The budget (amount the fed gov spends) is going to roughly be about $4 trillion. Now, by the time Obola leaves office you can expect the national debt to hit $20 trillion. If the interest rates rise to a just a low historical norm of 6% it will cost us about $1.2 trillion just to service the outstanding debt (.06 x $20t). If the interest rates rise to 8% it goes to $1.6 trillion (.08 x $20t). 10%? Interest due = $2 trillion. Get it? Do you understand why the gov MUST keep interest rates low to keep the ship afloat? Even at 6% the interest payments would consume about 30% of the current budget. Folks, even that is unsustainable. Over $2 trillion of the current budget (over 50%) is used to fund SS, Medicare, and other mandated programs (ie, welfare). Now, the gov is currently using gimmick accounting and QE to keep the interest rates artificially low. We are now into the 6th year of ZIRP (zero interest rate policy). For how much longer can this continue? Well, eventually the rates will have to rise involuntarily. It’s called the ‘law of economics’. What comes down must go up. As soon as Japan gets into hot water and starts unloading some or all of the $1.2t that they hold in US Treasuries – BOOM! Interest rates soar! And now you know the rest of the story. Oh, and China is not our friend. Their alliances with Russia, Pakistan, India, Iran are growing tighter. They have entered into discussions with those nations to replace the US Dollar as the global reserve currency. China holds $1.3t in US Treasuries. They might dump the treasuries just to screw with us. China is NOT our friend! Now you know the rest of the story! 😉

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Tags assigned to this article:
JapanJohn SeilerProp. 30Shinzo Abe

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