The pension reform bill, once withdrawn by the LDP-Komeito coalition, was revived by the Constitutional Democratic Party (CDP) and pushed through. Simply put, the reform “levels up” the national pension (basic pension) by siphoning funds from the employees’ pension (kosei nenkin) reserves. I see three major problems with this.
1. A Fundamental Policy Failure
The employees’ pension is a system for salaried workers; there is no moral or logical justification for politicians to seize these funds for those solely in the national pension system. This is not a tax, yet it is being treated as one. I suspect this is a ploy by fiscal hawks to prevent a future “fiscal crisis” caused by the impoverished “Lost Generation” flooding the welfare system. This is effectively the “taxation of pension premiums.” If the government wants to bolster the national pension, it should be done through direct fiscal spending or premium adjustments, not by raiding other workers’ savings.
2. The Unification of Fiscal Hawks?
The sequence of events is deeply suspicious: the Yomiuri Shimbun’s sudden push for matrilineal imperial succession, Shiori Yamao’s public endorsement of it, the subsequent freefall of the DPP’s approval ratings after her brief nomination, and the sudden anti-tax-cut rhetoric from the labor confederation (RENGO).
The DPP, once the champion of tax cuts, appears to have been completely neutered. Their recent proximity to the LDP and CDP on this pension “reform” suggests a murky realignment. While I believe fiscal hawks will eventually decline in the long run, a “Grand Coalition” of the LDP and CDP could keep them in power for now, locking Japan into the “Lost 40 Years” trajectory.
3. The Infinite Loop of Systemic Decline
As I have argued before, tinkering with the pension system in isolation will never work. We have entered a vicious infinite loop: Systemic Degradation → Prolonged Economic Stagnation → Further Systemic Degradation. The only way to break this cycle is through proactive fiscal policy.
While this blog is not primarily a political commentary, I have had to address political issues in two consecutive posts because the situation is dire. With the DPP’s popularity waning, voter turnout may stagnate. Meanwhile, I sense that Reiwa Shinsengumi on the left and Sanseito on the right are gaining ground. While neither party may achieve the broad appeal the DPP once had, voters who favor fiscal expansion have nowhere else to turn, as the mainstream parties have all surrendered to fiscal fundamentalism.
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