The great Dan Clifton of Strategas Group nails the difficulties of paying for reform through spending cuts or tax hikes:
The new Japanese government is redirecting the country’s stimulus plan (WSJ):
The Japanese government said Friday it will scrap part of the previous Cabinet’s stimulus package, freeing up 2.926 trillion yen ($32.38 billion) so that it can redirect the money toward more effective projects to stimulate growth.
I just wanted to highlight some items from a previous post on healthcare reform:
1) It costs $829 billion.
It accomplishes this financial feat, however, through budgetary trickery. The plan includes a start year of 2010, even though no money is spent that year and just $14 billion through 2013. Cost the plan out from 2011 through 2020 and it suddenly morphs into a trillion-dollar plan. Indeed, the average annual cost from 2015 through 2019 is $150 billion a year
The conclusion from this interesting VoxEU piece:
In short, in contrast with growing dollar scepticism and even though US external accounts continue to point to dollar weakness despite the recent correction, the fast rebound of the US economy and the undoing of the monetary stimulus may deliver higher rates in lieu of a weaker dollar in 2010.