Jun Azumi, the Japanese government’s Minister of Finance, has issued a severe warning that because of the ongoing government standoff over a bill meant to finance the country’s deficit, Japan could be completely out of cash by the end of October. This dire situation would be credited to various state spending like government employee salaries, pensions, and benefits for unemployment. The financing bill would fund almost half of the needed budget through the sale of government bonds, but it has repeatedly been held in limbo as opponents of the ruling Democratic Party of Japan (DPJ) have control over the Upper House and threaten rejection.
Pleading with the DPJ and its opposing Liberal Democratic Party (LDP) for cooperation, Jun Azumi said it doesn’t matter which party has control. If the bill is not passed, the Japanese government’s spending will come to a stand still. As the world’s third-largest economy, Japan is also considered to have the world’s highest public debt, and if government spending stops, the country’s credit ratings will drop even further.
This deadlock revelation comes shortly after Prime Minister Yoshihiko Noda earned cooperation from the LDP over a bill to double Japan’s 5% sales tax by 2015. This has earned the bill passage through the Lower House, and is now in consideration in the Upper House. However, this bill’s passage has led to large exodus from the DPJ in protest, which now threatens a loss of power for Noda and possible general elections to be called. There is already skepticism worldwide about Japanese politician’s ability to control their country’s finances. A senior economics analysts from Mizuho Securities in Tokyo says that this is the government is facing such uncertainty right now, that it’s unbelievable opposing parties aren’t trying harder to work together to prevent such an enormous collapse.
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