Japan To Slash Welfare Benefits In Attempt To Root Out "Comfortably Poor"

Tyler Durden's picture

Two months ago we demonstrated one of the biggest paradoxes of the current iteration of the US welfare state, in which a single mom earning gross income of $29,000 has the same disposable income after all net benefits as a worker who has gross income of $69,000. The same logic is applicable to all those who instead of working, opt to receive foodstamps, disability payments, and the occasional Obama phone, all the while dropping out of the labor force and making the BLS' job of indicating a dropping unemployment rate a little easier. And while the US is fully intent on converting an ever rising portion of the population into these "comfortably poor" zombies who no longer have any marketable skills, and are completely unqualified to be competitive in an increasingly more specialized workforce, one place where such welfare handouts will no longer be tolerated is Japan, of all places.

As Japan Times reports, "welfare benefits will be slashed by ¥74 billion over a three-year period starting from fiscal 2013, after a government panel found that some people are making more on the dole than the average low-income person who is not spends on living costs, it was learned Sunday." We await with eager amusement as this attempt to impose austerity on the comfortably poor takes place in the US next. Considering there was nearly a revolution in California a few weeks back when EBT cards malfunctioned for a few brief hours, the outcome of a comparable belt-tightening in the US would have truly hilarious, not to mention lethal, consequences.

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The decision to lower standard benefit payments by 6.5 percent was made by welfare minister Norihisa Tamura and Finance Minister Taro Aso. The reduction will hit in August.

 

Since the standard benefit payment provides the basis for determining other levels of public assistance, such as subsidies for school expenses, reducing it may also affect low-income earners even if they are not on welfare.

 

Tamura said after the meeting that he will implement the measures so the decision does not adversely affect such earners.

 

The actual amount doled out per household will be slashed by a maximum of 10 percent from the current level, which is based on age, number of family members and area of residence.

 

Welfare recipients hit a record high of 2.14 million in October 2012 and the state budget for benefits, including medical assistance, stood at around ¥2.8 trillion for fiscal 2012 ending in March.

 

Later Sunday, the government and ruling parties approved the fiscal 2013 budget proposal, with expenditures in the general account budget totaling ¥92.61 trillion. The Cabinet will sign off on the budget on Tuesday and send it to the Diet.

 

At the approval meeting, Prime Minister Shinzo Abe called for the swift enactment of the budget because it “will enable us to implement economic measures in a seamless manner and tackle major challenges, such as reconstruction (from the 2011 quake and tsunami) and disaster prevention.”

And since this is the same Japan, and that is the same Taro Aso, who a week ago modestly proposed to Japan's elderly to hurry up and die already, we can now see just what form this forced de-welfaring, and de-elderization, will take. Then again, Japan is lucky in that its underfunded welfare obligations are some 2-3 turns of GDP lower than those in the US. Because heaven forbid one day none other than the US has to follow suit.

That would be the day the status quo music finally died.