Japan, like US, calls for government cuts

Japanese Prime Minister Zenko Suzuki has staked his political career on a new catch phrase: "government reform." His campaign bears similarities to the goals being pursued by President Ronald Reagan.

And yet, by all international standards, Japan has a relatively small and cheap government.

The number of civil servants as a proportion of the working population is 99 per 1,000, compared to 172 in France, 205 in the United States, and 239 in Britain.

Japan's ratio of taxes and social security payments to national income is also smaller: 31.5 percent, against 38.1 percent for the United States, 47.8 percent for Britain, and over 50 percent for France and West Germany.

So the problem really is not that Japan has a big or intrusive government, but rather the budget deficit is too large. "Government reform" therefore, is the code word for rehabilitation of the national finances.

In the current budget, the red ink figure represents 26 percent (about $60 billion) of total outlay.

The deficit is largely a legacy of the first oil crisis in 1973 that pushed Japan into its worst postwar recession.

The slump forced the government to prime the pump through record deficit spending --funded by more and more bond issues.

Later, under fire from other countries for its huge trade surpluses, the government tried, with some success, to boost imports by stimulating domestic consumption.

As a result, by the end of fiscal 1981, public indebtedness will be nearly a quarter of the gross national product.

The first major steps towards "fiscal reconstruction" have been taken. But a mixed bag of tax increases yielding $7 billion has not gone down well wit h the public.

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