Japan's economic recovery is gradually gathering impetus, provoking considerable debate on how to control the spiraling budget deficit and put the nation's financial house in order.
To our consternation, however, discussions on fiscal reconstruction are tending to put more weight on tax increases than reductions in government spending.
While the economic recovery remains tenuous, tax increases will no doubt harm still-fragile consumer sentiment and undermine efforts to get the economy back on track.
Before plunging into discussions on tax increases, we should first seek ways to slash government spending so as to ease the burden on taxpayers.
Needless to say, a careful analysis of the cost of policy objectives is helpful in pinpointing what fiscal spending can be slashed.
The cost of policy objectives shows how much taxpayers' money is allocated to the general account budget -- the nation's basic spending plan -- to finance present and future subsidies.
It also shows the relative efficiency of the projects being undertaken.
If the benefits people can derive from the outlay come at too high a cost and the policy objective no longer meets the needs of the time, the project in question can be discontinued, leading to lower allocations to the general account budget.
Before discussing the need for tax increases, we should examine the cost of each policy objective in the entire fiscal investment and loan program.
A thorough examination of the efficiency of projects and policy objectives must precede any debate on tax increases.