Wednesday, July 30, 2014

Abe Is No Spendthrift Where Defense Is Concerned (Still) and Other Stuff

Collective self-defense means lashing any overseas projections of Japanese military power even more tightly into the US hub-and-spoke network of security alliances. That understandably makes the regional hegemon aspirant whose only supporter in Japan seems to be an octogenarian expat from Australia—yes, the other modern state founded on genocide and ethnic cleansing, not that there’s anything inherently wrong with that—upset. But South Korea? Those people should be dancing in the streets by now for this yet another constraint on Japanese plans to retake the Korean Peninsula…except they aren’t…OMG DON’T TELL ME THEY’RE PLOTTING TO COAX CHINA (YET AGAIN) TO REPRISE THEIR JOINT 12TH CENTURY DOUBLE-BARREL (FAILED) INVASION.

…wait till the Sankei Group hears about that

Kidding. Actually, the South Koreans are afraid that Prime Minister Abe will team up with Kim Jong Un, who is on the outs with Xi Jinping, to overrun South Korea (Jong Un, we provide the robots, you provide the men). Now that explains why the Xi-Park relationship is heating up.
Oh, the Japanese defense budget. The ongoing Medium Term Defense Program, which runs through FY 2014-FY 2018, puts the total at 24.67 trillion yen, which runs to about a 0.8% increase per year, a figure that has been talked up by some analysts. But the budget is already up 2.8% year-on-year in FY 2014 at 4.8848 trillion. Barring an unforeseen turn of events, the annual budget would have to observe a near standstill notwithstanding inflation to bring the five-year budget under the 24.67 trillion threshold. The secret, in case you haven’t guessed it already, is that the target was expressed in real terms, with an implicit Abenomics, baked-in 2% inflation target. Factor in the 2% inflation target phased in over three years, and you should be able to work in a 2% increase per year in real terms.

Trust me, kids, it pays to do your own arithmetic.

Still, a 2% increase in real terms is pretty modest, peaking out at 200 billion yen per year—roughly 0.2% of the general budget—if and when the inflation target is met. And if anyone tells you that things could turn out to be otherwise, then that someone knows something that the rest of planet earth doesn’t know, since it was the Abe cabinet that authorized that Program. And Prime Minister Abe will be gone in the last year of the Program—if not earlier if the economy tanks and the LDP decides to throw him out before that. So much for the claims of the scaremongers.

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