The Purpose Of "Abeonomics" Is To Rip Off Japanese Savers To Bail Out Its Government
They might try to justify it by pointing out that growth has been weak in Japan in recent years. But that is basically entirely a result of its demographic implosion-over 40 years of birth rates well below the replacement rate in combination with a "no gaijins allowed"-immigration policy means that the number of Japanese younger than 65 declines by nearly 1% per year. Set in relation to its working age population, Japan has actually had stronger GDP- and employment growth than most Western countries. And as it happens the employment to population ratio for 15 to 64-year olds is at an all time high, while the unemployment rate is only 4.3%, lower than in all EU countries and also lower than in New Zealand, Australia, the United States and Canada.
Even assuming that Asian countries have a naturally structurally lower unemployment rate (in Singapore, Hong Kong and South Korea, the unemployment rate is about one percentage point or somewhat more lower), the "natural" Japanese unemployment rate is likely at most only about a percentage point below the current rate.
This means that even using Keynesian models, Abe's policies will only have a very modest effect on output and employment. So why are Keynesians so enthusiastic about it, and perhaps more importantly, why is Shinzo Abe so eager to implement it?
The secret is that they all want to confiscate money from Japanese savers to bail out the highly indebted Japanese government. Japan as a nation have a positive net international investment position, but the Japanese government is extremely indebted. Total government debt is 245% of GDP, significantly higher than even Greece. And as we all know, Greece isn't exactly a nation with a low government debt burden.
So the plan is basically to bail out the highly indebted Japanese government by ripping of its private savers. Strangely, this hasn't caused anyone of those outraged at the alleged confiscation of Cypriot savers' holdings.