Japan is headed to record-high budget spending of 96 trillion yen ($1.2 trillion) as the nation tackles the costs of recovery from the March earthquake and tsunami.
The Cabinet approved the draft budget for the fiscal year starting April 2012, covering massive costs for disaster reconstruction as well as decontamination efforts for radiation leaked from the nuclear power plant.
The government will rely on new debt for 49 percent of its annual revenue, the highest level ever.
The government will rely on new “debt for 49%” of its annual revenue, the highest level ever borrowed.
However this is still a cheat that the payment for so called “basic pension” is not included in this budget and the government tries to rely on “Issue Bonds” which is the government bond depend on the future consumption tax increase.
Japan's keep on expanding public debt pushes the government to raise the consumption tax, now at 5 percent, up to 10%. This brings a movement of resistance in public which disenchanted with what some have criticized as wasteful spending favoring bureaucrats.
Japan is reducing its spending for developing atomic energy. But it will need to spend far more than the amount saved to safely close down the nuclear power plant, which went into meltdown caused by the disaster.
Damage from the March 11 disaster is estimated at between 16 trillion yen ($198 billion) and 25 trillion yen ($309 billion), according to Japan's Cabinet Office, making it the world's most expensive natural disaster ever.
That number doesn't include the cost of the nuclear crisis, including evacuation, decontamination and damage expenses.
The government says that it has tried to save money and cut budget but it is just a cheat.
