Japan restless over economic failures of ruling party

The Japanese public is showing signs of growing unhappiness, if not anger, with the ruling party's acrimonious power struggle.

And with the economy continuing to deteriorate, political commentators are seriously suggesting for the first time that the Liberal Democratic Party's brand of conservatism, unchanged through three decades of unbroken power, has run its course.

Four members of the party are seeking to succeed Zenko Suzuki as Japan's next prime minister. But whoever takes over will face basically the same problems that have defeated the combined efforts of five Liberal Democratic prime ministers in the past nine years.

One newspaper editorial has spoken scathingly of a corrupt ''ancient regime'' trying to cling to power ''against the march of time.''

The critics point out that all four candidates for the premiership are members of Suzuki's current administration. They should be joining him in accepting joint responsibility for failure of government policies, not squabbling over who is next in line to the throne, these critics say.

The ruling party this week continues efforts to try to select a successor through consensus rather than through a divisive party election, scheduled for late November.

Meanwhile, prolonged absence of strong leadership will result, among other things, in delay both in implementing a proposed $15 billion supplementary budget (mainly for extra public works spending to try to generate a business upturn) and in compiling a fiscal 1983 budget to haul Japan out of prolonged recession.

The chief spokesman of big business, Yoshihiro Inayama, president of the prestigious Federation of Economic Organizations, seemed to speak for many when he urged the Liberal Democratic Party to ''come to its senses. . . . Given the current economic difficulties, this is no time for political maneuvering. A power struggle now could adversely affect the next general election and lead to disastrous political unrest.''

A major daily said the LDP's typical bid to settle the premiership battle through backroom bargaining rather than open election demonstrated clearly that the party was controlled by ''unreasonable forces'' and was under a ''reign of terror.'' The party's future depended on a thorough purge of old corrupt elements and a fresh start under a different type of leader than it had previously produced, the newspaper added.

This is not to say that Japan is ripe for a new regime, much less a socialist type of government. The LDP is safe as long as the rural bloc remains ultra-conservative - and, through continued gerrymandering of electoral districts, enjoys power out of all proportion to the number of votes - and big business remains financially supportive.

But both these key pillars of conservatism have been weakened by the economic disruptions of the past few years.

Since the first oil crisis in 1973 sent energy prices through the roof, Japan has maintained an international image of having coped best. But the price has been tremendous, most notably in the area of government debt. A widening gap between income and expenditure has defied every conventional solution, forcing the government to borrow more and more money to make ends meet.

Deficit-covering bond issues now amount to 30 percent of the operating budget. The outstanding debt has reached $261 billion, one-third of the gross national product, and is expected to pass $350 billion within a few years.

Prime Minister Suzuki took office pledging to stop spilling red ink. He failed. Amid recession, tax revenue in fiscal 1981 fell short of expectations by more than $11 billion. This year the income shortfall is expected to exceed $22 billion.

Suzuki pledged not to increase taxes but was unable to cut much fat off the budget. So, he had to perform an about-face and accept more bond issues.

His successor won't be tied to these policies, but that is little consolation. Although Finance Ministry officials insist a tax increase is the only answer, political considerations make it a suicidal choice when local and national elections are scheduled next year. A cut in government spending, however, is fraught with equal difficulties in public unpopularity and could also exacerbate Japan's problems with the United States over trade policies and defense spending.

The public hasn't had a tax break since 1977, and the government has taken all the annual wage increase and more since then.

The business community is also critical and restless, insisting the solution to budgetary deficits is to eliminate government waste and reduce a bloated bureaucracy rather than to raise taxes.