Japan May Cut Construction Stimulus

Japan’s opposition party has vowed to dramatically reduce spending on public works. As Stuart Biggs and Masatsugu Horie write for Bloomberg News, that may be difficult: public works and its closely connected construction spending is the fifth largest employer in Japan. Infrastructure spending accounted for 4.4% of Japan’s GDP in 2008. Heavy spending on infrastructure in recent years has led to a public debt rate that approaches twice its GDP (estimated at $175,000 per person). For comparison, US public debt is approximately 61% of GDP ($30,500 per person).