Japan has a big debt load and a high deficit, but it self-finances its debt due to “excess” personal savings that Western economists think should be forced into the market through relentless inflationary policies. Japan has refused to do this. It’s not even necessarily true that jacking up the sales tax will do much more than strangling the economy further, but like I said, economic orthodoxy pushes hard towards inflation and currency depreciation; readers in the US and the UK may know what I’m talking about.

We’ll see how PM Noda deals with this taxing problem. If he wants to fight an election over it, that’s his head on the line, not mine. – J