Japan Fiscal policy

Japan has a very aggressive approach to turning around the recession.

The record budget, worth $1 trillion, for the fiscal year starting in April will pay for Prime Minister Yukio Hatoyama’s ambitious stimulus agenda, including cash handouts to households with young children, free tuition at public high schools and income support for farmers.

Mr. Hatoyama, who heads the Democratic Party, is looking to bolster both Japan’s deflation-stoked economy.

“Creating a virtuous circle in which a growth strategy spurs employment and demand will help combat deflation,” Mr. Hatoyama said.

Hatoyama understands how the economy works. In contrast, we are closing schools and laying off teachers.