経済・社会・政治の危機と現代財政(グローバリゼーション下の経済金融危機と国家-新たな金融・財政政策の展開を踏まえて,第59回大会共通論題)

抄録

This paper examines how government deficit and debt increase, and when countries are confronted with fiscal crises. Each developed country can be characterized as "social democratic", "conservative", "liberal" or "familial" regime. Japan is a "familial" regime country with low tax burdens. Why is there no convergence of the regimes? First, the decisions of investment are not so related to the level of tax burdens. Second, there is a variety of countries in people's trust on government sector. Third, there is a variety in policies on the aging society. In many countries, inequality has been enlarging and economic, social and political systems have been in crisis since the "global financial crisis". In particular, severe fiscal stress or crisis can be found in countries with "familial" and "liberal" regimes. Why does the "structural deficit" appear? First, if tax revenues are insufficient to finance social security expenses, it will cause a structural deficit. Second, when socio-political conflicts become intense, the expenditures of related services increase. Third, issuing "Construction Bonds" easily leads to wasteful projects. Fourth, if uncertainty about the future is not eased, the marginal propensity to consume is so low that the multiplier effect of Keynesian policy is limited. Fifth, there is no assurance that the tax reductions which supply-side economists advocate will promote investment. Sixth, when the "bubble" bursts, the decline of tax revenues and the policy to relieve financial institutions will increase the deficit. When does a fiscal or political crisis emerge? First, in countries where people do not trust the government sector, tax increases to finance rising social security expenses is difficult. Second, when foreign investors possess a high share of government debt, their decision to change portfolios may cause a decline in bond prices and a rise of interest rates. If international organizations intervene to avoid defaults, sovereignty in policies will be in danger. Third, if a member of a regional economic integration falls into deep debt, the integrating organization may intervene in the policies. If it forces severe retrenchment, there will be a severe political crisis. Fourth, if the government bond monies are used on wasteful services, fiscal stress is enlarged. Fifth, since the governments in debtor countries don't have influence over the interest rates in financial markets, they cannot save debt service expenses. Sixth, foreign relations and ethnic tensions themselves may bring political crises. Countries experiencing many of these elements may be confronted with sudden fiscal crises. Even in other countries, fiscal crises may be "creeping". Japanese long-term interest rate is low, as household savings have purchased most bonds. That is why international organizations have not seriously pressured Japan to reduce fiscal deficit. Since Japanese population is decreasing, increases in saving cannot be expected. While economic recovery is desirable, it will be accompanied by a rise in interest rates. Unless the Japanese government can reduce the deficit by then, fiscal flexibility will be lost. The main measures to reduce the deficit are expenditure cuts and tax increases. In the case of Japan, there is much room for tax increases. There is no basis to slash social security expenses and load more risk onto individuals and families. Fiscal reform as an institutional change is realized with a combination of many political institutions based on the history of each country. In a country where the government sector is not trusted and the tax burden is light, it is very difficult to realize tax increases. If criticism of the bureaucracy becomes the criticism of the public sector itself, the fiscal consolidation problem will intensify.