One year ago the government published a five-year budget projection showing how it expected to make ends meet in fiscal 2002-06. Now, the Council on Economic and Fiscal Policy, chaired by Prime Minister Junichiro Koizumi, has revised the plan -- downward. The basic picture is that the budget deficit will continue to widen in the five years beginning in fiscal 2003.

According to the updated outlook, tax revenue will not increase dramatically because of anemic economic growth. Deflation is forecast to end, with fingers crossed, in fiscal 2005 or 2006. On the other hand, social security payments, such as those involving health care, pensions and nursing care for the elderly, will rise at an accelerated pace as the population ages. As a result, the annual bond issue will exceed 40 trillion yen beginning in fiscal 2004 -- a sum equal to about half of the budget.

The fiscal 2003 budget, now before the Diet, already includes 36.4 trillion yen in new bond sales, far surpassing the 30 trillion yen limit imposed by Mr. Koizumi last year as a showcase of his fiscal reform initiative. That limit is now so far removed from reality that it has no practical meaning. This is seen by the opposition parties, as well as the Liberal Democratic Party's old guard, as a sign that his deficit reduction plan has all but collapsed.