Lessons from Japan for America's Budget Warriors

With Wednesday’s Federal Open Market Committee (FOMC) statement on the horizon, and Japanese Prime Minister Shinzo Abe’s pushing to print more money and enact an ambitious stimulus program, American Enterprise Institute (AEI) economist John Makin has released his latest economic outlook which examines lessons from Japan’s past for current American policymakers.

Is the United States on the precipice of a lost decade?

Makin argues that Japan’s experience with debt, deficits, and deflation can teach the United States important lessons: use monetary policy to avoid deflation, aim for gradual deficit reduction, close tax loopholes to lower the marginal tax rate, and reduce the budget deficit.

What should US policy makers do?
1.    Don’t obsess about deficits (as Makin has explained they are, unfortunately, sustainable)
2.    Enact tax and entitlement reforms now
3.    Cut spending later

Click here to read the full report.

Contact [email protected] (202.862.5829) to set up an interview. 

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

John H.
Makin

What's new on AEI

We still don't know how many people Obamacare enrolled
image The war on invisible poverty
image Cutting fat from the budget
image Speaker of the House John Boehner on resetting America’s economic foundation
AEI on Facebook
Events Calendar
  • 22
    MON
  • 23
    TUE
  • 24
    WED
  • 25
    THU
  • 26
    FRI
Monday, September 22, 2014 | 2:30 p.m. – 4:00 p.m.
Policy implications of the new US labor market normal

We welcome you to join us as a panel of economists discuss US wage and price prospects in the coming months and the implications for the Federal Reserve’s current unorthodox monetary policy.

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.