How much is too much?

When it comes to Japan’s bulging public debt, no one quite knows, but at about $75,640 for each of the country’s 127 million people, the burden is starting to worry both voters and investors. You can even see it climb in front of your eyes on an unofficial Website.

That’s why some pundits say it’s time for new Prime Minister Yukio Hatoyama to make some tough decisions about delaying costly spending programmes promised in the August election that vaulted
his Democratic Party to power.

But with the economy fragile and an election for parliament’s less powerful upper house less than a year away, many wonder if he will.

Support for Hatoyama’s cabinet slipped eight points to 63 percent in a Yomiuri newspaper poll this week, while 85 percent said they’d rather see some campaign pledges broken than a rise in a public debt, already headed for more than 200 percent of GDP this year.

Taking voters at their word, however, could backfire.

“In terms of spending prioritites, it might be possible to prepare public opinion for changes in details in the run-up to the upper house election,” said Sophia University’s Koichi  Nakano. “But it would be risky.

“Even if the majority agree some policies are not needed and are more worried about public finances, there is not necessarily agreement on what is not necessary,” he said. “Whatever policy is targeted, someone will say ‘That’s not what I meant’.”

Holding down spending could risk causing the economy,  now emerging from its worst recession in 60 years, to dip again. And focusing on the market-friendly reforms some economists say are needed could be a tough sell, given Hatoyama’s promises to pursue a kindler, gentler capitalism.

“There are no good choices here,” said Robert Feldman, chief  economist at Morgan Stanley in Tokyo.

Hatoyama has also pledged not to raise Japan’s 5 percent sales tax for the next five years, although most economists say a rise will be needed to cope with the rising social security costs of the world’s fastest-ageing population.

Showing commitment to fixing tattered state finances could help reassure voters and investors, if the plan were credible. But Hatoyama’s window of opportunity for hard decisions could start to close if his ratings slide.

“The Democrats’ support is broad but not strong … and Hatoyama’s personal popularity is weak,” said Shusei Tanaka, a former economic planning minister who left the then-ruling  Liberal Democratic Party with Hatoyama and others more than a decade and a half ago.

“There is a feeling that voters will allow them some missteps, but if they make a mistake in fundamental policies, their support could fall suddenly,” he told me.