Abe’s Tax Hike Bullets Japan into Recession | USDemocrazy

 

Eyebrows raised in excitement last week when Japan unveiled the world's fastest magnetic-levitation bullet train .

But those eybrows didn't stay raised for long.

They furled quickly on the sour news that Japan, with one of the world's largest economies has returned into recession.

Most of the world's economists  were shocked to learn that Japan's GDP dropped 1.6% in the 3rd fiscal quarter .  After falling 7.1% during the second quarter, Japan's GDP is officially in recession.

There seems to be little that the Japanese government can do to solve the country's spending problem. So what makes Japan's situation so unique?

Prime Minister Abe has been tirelessly working to save the Japanese people's economy from massive deflation by encouraging them to shop and spend as if their lives depended on it.

The government has also taken spending into its own hands and financed countless public infrastructure projects to keep Japanese businesses afloat in a country of tight-belted rainy-day consumers.

 But, with serious public-works debt piling up, the Japanese government has turned to hiking up taxes in order to balance the budget. In April, Japan raised its national sales tax  from 5% to 8%.

Before the Q3 figures were released, Abe had announced plans for another increase to 10% by October of 2015. Experts say that the current figures suggest Abe will hold off on his new tax hikes for the time being.

However, the world has seen how experts can be dead-wrong about Japan and Prime Minister Abe.