The last 12 months were devastatingly costly for Japan.
As Covid-19 fallout shoulder-checked the global economy, Tokyo rolled out a $2.2 trillion rescue package—more than 40% of gross domestic product. More recently, Prime Minister Yoshihide Suga telegraphed another $708 billion of support as deflationary forces return.
Suga’s team capped off the last 12 months circulating a truly scary number: 106,610,000,000,000. That’s the size, in yen terms, of Tokyo’s annual budget for fiscal 2021. Yet the unprecedented 106.61 trillion yen ($1.03 trillion) Suga needs just to fund his government is really a result of bad decisions made over the last 12 years.
The dozen years since the global financial crisis of 2008 are as good a window as any to wonder what might have been. If only the resolving of prime ministers and finance ministers since then had raised Japan’s economic game. If only any of the six governments in power since 2008 had loosened labor markets, cut bureaucracy, catalyzed a startup boom, devised a pro-growth energy policy or empowered women.