Bell Toll: Sanae Takagi's U.S. Visit, "Defense Bubble" Cannot Save Japan's Economy

Original Title: “The Defense Bubble” Cannot Save Japan’s Economy (Chong Sheng)

Recently, Japanese Prime Minister Sanae Takaichi visited the United States. This diplomatic show, which heavily catered to the U.S., has been widely criticized by Japanese public opinion. Insightful Japanese have pointed out that the Takaichi administration ignores economic and people’s livelihoods, continuously pushes for constitutional revision, increases defense spending, and expands arms exports, all to “flatter the U.S.” under the guise of “strengthening deterrence.” This is a “completely wrong path.” Covering up domestic economic difficulties with hype about external geopolitical risks is merely a political smokescreen, exposing the Japanese government’s helplessness in macroeconomic governance.

Since taking office, Sanae Takaichi has promoted an aggressive “Takaichi Economics” policy, claiming to pursue a “responsible fiscal policy” while relying on large-scale government spending and ultra-loose monetary policy. She hopes to revive the economy through the “trickle-down effect” of big corporations. However, in the face of a reality where declining birthrates and aging populations have made labor shortages normal, and the tax base continues to shrink, such reckless policies have pushed Japan’s national debt to over 260% of GDP, crossing a dangerous warning line. Mainstream Japanese media have expressed strong concern and criticized Takaichi as “extremely irresponsible.” Former Bank of Japan Governor Haruhiko Kuroda pointed out that under current conditions of inflation and yen depreciation, continued loose fiscal and monetary policies would worsen inflation further. Now, affected by geopolitical tensions and Middle East instability, Japan is suffering from a double blow of “oil premiums” and yen depreciation, with impacts accelerating from energy sectors to multiple aspects of people’s lives.

Japan’s economic recovery has been difficult enough, yet Takaichi insists on taking a reckless militarist path, further burdening the people. Her government is vigorously pushing for constitutional revision and military expansion, which is not only a geopolitical gamble but also a dangerous economic strategy aimed at reviving militarism and returning to the old path of “stimulating the economy through military procurement.”

The right-wing forces represented by Sanae Takaichi are paving the way for increased defense spending by creating perceived threats, using security anxieties to justify shifts in industrial policy, and attempting to “feed” key sectors under the guise of “defense.” Japan’s defense industry has long had close ties with the government, with massive defense orders directed to domestic conglomerates. In 2023 alone, Mitsubishi Heavy Industries secured orders worth up to 1.68 trillion yen from the Japanese government. Retired senior officials from the Ministry of Defense frequently become special advisors or directors at companies like Mitsubishi Heavy Industries and Kawasaki Heavy Industries, leveraging their inside knowledge of weapons procurement rules to help secure lucrative projects.

Since taking office, Takaichi has accelerated the goal of reaching 2% of GDP for defense spending, aiming to achieve this by fiscal year 2025. By the end of 2025, Japan’s government approved a budget exceeding 9 trillion yen for fiscal year 2026, marking 14 consecutive years of growth. Continually expanding the defense budget further cements the interests between bureaucrats and the defense industry. Her government also plans to loosen restrictions on arms exports, attempting to profit from weapon sales abroad. For a long time, Japan’s large corporations could only rely on domestic orders due to the constraints of the “Peace Constitution.” To change this, Takaichi’s government is actively seeking to lift restrictions on the export of offensive weapons, planning to fully open the export of defense equipment, aiming to turn the military-industrial complex into a “money tree” for Japan’s economy and break free from postwar constraints. Once exports are liberalized, Japan’s military-industrial system will become more expansionist, creating conditions for right-wing forces to push for constitutional amendments and seek involvement in international conflicts.

Japan’s economic recovery requires structural reforms. However, Takaichi’s government, to avoid the political costs of such reforms, has shifted policy focus to defense and economic security, reducing economic restructuring to “crisis management investments” in defense and related fields, thus achieving short-term public mobilization and economic stimulus. To support her U.S. visit, her government has pushed through a record-high budget review domestically, but the review process in the House of Representatives was the shortest in this century. Japanese media criticize Takaichi for gambling everything and forcing the ruling party to “force through” in the lower house.

While this approach may generate a short-term “defense bubble,” it essentially drags Japan’s economy onto a “new militarism” chariot, with the ultimate cost borne by the Japanese people. Confronted with recent arms purchases from the U.S. totaling 3.55 trillion yen, Japan’s “Tokyo Shimbun” questions: “Why does Japan continue to pour taxpayers’ hard-earned money into buying U.S. weapons? Should we continue this ‘buying spree’?” To fill the ever-expanding defense budget, the Japanese government plans to implement tax increases involving tobacco, corporate, and personal income taxes, directly increasing the tax burden on domestic businesses and households.

Takaichi’s obsession with militarism is not a cure for Japan’s economic woes but a poison accelerating the body’s decay. This political gamble, attempting to mask governance failures with military orders and reckless fiscal expansion, is doomed to fail in solving deep-rooted structural problems. Repeating the path of militarism and trying to boost growth through confrontation and militarization will only push Japan further into an abyss.

(Source: People’s Daily)