--The Asahi Shimbun, Jan. 1
EDITORIAL: Painful choices needed for sake of future generations

The new year has arrived, but Japan continues to grapple with a wide range of formidable challenges.

Besides dealing with all the intractable problems created by last year’s Great East Japan Earthquake and the Fukushima nuclear disaster, the government also needs to tackle the political challenge of raising the consumption tax in line with a draft plan finally announced by the ruling Democratic Party of Japan at the end of last year.

The sovereign debt crisis in Europe, which has been threatening to knock the world economy off the growth track, is also demanding close attention and monitoring.

It is certainly a coincidence that all these challenges have emerged to confront the nation at the same time. But there seems to be a common thread.

All these challenges appear to indicate that the age of continuous economic growth in industrial nations that began soon after the end of World War II is now coming to an end.

Huge deficits from financial bubbles

The accident at the Fukushima No. 1 nuclear power plant and its dire consequences have forced us to reflect seriously on the reality that an energy source that has been supporting our affluent society is in fact standing on very shaky ground.

The towering budget deficits in Japan, the United States and Europe are the prices of their reckless efforts to stoke economic growth.

World history is littered with grim episodes about aggressive monetary expansion to revitalize a sputtering economy ending up creating bubbles with serious consequences.

Japan also produced speculative bubbles after the end of its fast economic growth and piled on debt to deal with the consequences of the bursting of these bubbles.

The Japanese government sank deeper into the budget morass as it kept issuing huge amounts of bonds to finance measures to stimulate economic growth.

The United States and Europe, where housing bubbles popped in a global recession triggered by the collapse of Lehman Brothers in 2008, are now following the same path as Japan, struggling with huge budget deficits.

Industrial nations, which have built more or less affluent societies, are now having a hard time finding a new powerful engine of economic and job growth.

Economic growth is indeed a magic wand to solve many problems.

But many industrial nations have gotten themselves in an awful bind as they have failed to discover new seeds of growth and turned to fiscal and monetary stimulants to re-energize their economies.

It has become clear that the traditional policy approach to stimulating economic growth no longer works.

The world is obviously at a major turning point in history.

"Herbivores" a byproduct of society's adjustment

Various signs of profound changes are already visible.

Last autumn, Japanese people eagerly welcomed Bhutan’s King Jigme Khesar Namgyel Wangchuck and Queen Jetsun Pema when they visited Japan.

Japanese were not just charmed by the royal couple’s amiable and unassuming characters. They also saw one possible future for their country in the Himalayan kingdom’s unique policy focus on spiritual fulfillment rather than on material wealth.
This is symbolized by the “Gross National Happiness,” an indicator invented and espoused by the Buddhist country to measure the quality of life among people.

Tokyo’s Arakawa Ward has been working to develop its own indicator of happiness for seven years by learning from Bhutan’s experience. Similar efforts are also under way in other parts of Japan.

The emergence of Japan’s “herbivores”--mild-tempered young men who are passive in building relationships with the opposite sex and don’t have strong worldly desires or ambitions--is a sign that Japanese have started adapting to social and economic changes due to their nation’s shift to a post-growth era, according to a theory proposed by Mizuho Research Institute.

Herbivore men don’t have strong expectations or complaints about the world around them but seek mild bonds with other people.

Many young people who rushed to help victims of the March 11 disaster appear to fit the mold.

Given the growing concerns about the destruction of the environment and depletion of resources on our planet, it is good for people to adapt to low growth.

The question, however, is whether Japan will be able to deal with the problem of gargantuan public debt and overcome the effects of the rapidly aging population amid low birthrates without achieving economic growth.

This question brings us to another colossal challenge.

In this age of global competition, when emerging countries are fiercely increasing their economic might to catch up with industrial nations, Japan, with its shrinking population, cannot afford to take it easy.

It will be difficult for Japan even to maintain the status quo unless it makes strenuous efforts.

Reality dictates that Japan needs to open itself more to the world and make more aggressive moves to capitalize on the growth potential of emerging countries while developing young people who can compete globally.

If we fail to do so, our future will be in jeopardy.

From growth to maturity

How can we deal with two conflicting challenges: adapting to zero growth and striving to stoke growth?

This is undoubtedly the hardest economic trial this nation has experienced in its history.

We propose that sustainability has to be the cardinal guiding principle for our efforts to achieve these goals.

That’s because we should put top priority on the well-being of future generations.

We should stop trying to inflate economic growth with fiscal and monetary expansion.

The debt we run up today will have to be paid back by future generations decades down the road. But they have yet to be born.

That means these future generations will be forced to bear the onerous consequences of decisions they have not made themselves.

This is a serious defect in democracy.

We must stop repeating this folly now.

What we need to do is to lay a solid foundation for a matured society by pushing through integrated tax and social security reform.

Rebuilding social services like health and nursing care and education would help create a new society not driven by economic expansion.

Tax increases and spending cuts inevitably cause pain.

Such austerity measures tend to slow the nation’s economic growth. But the painful effects of these efforts must be accepted for the sake of future generations.

It is also necessary to phase out as soon as possible nuclear power generation, which produces radioactive waste that will remain a serious health hazard for thousands of years.

It is also important to promote the use of renewable energy sources and make the economy more environment friendly.

“Silver” markets for products aimed at the elderly and “green” industries that produce and sell eco-friendly products could be new sources of sustainable economic growth.

The government’s policy efforts should be focused on these areas.

Such a policy shift would also mean reorienting society from growth to maturity.

We have been reveling in the age of steady economic growth for far too long.

We must now take a hard, long-term look at the changes that are taking place and the direction history is following, and then start carrying out steadily what we need to do now.

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