Japan's public handouts to the poor to be cut

Confirming the failure of the Japanese Model for handling a bank solvency led financial crisis, the Japan Times reports (hat tip Jesse) that public handouts to the poor will be cut.

The reason that Japan has to rewrite its social contract is the enormous sovereign debt it has taken on since the beginning of its financial crisis in late 1980s.  This debt is a reflection of the cost of protecting the book capital levels of the Japanese banks.

Welfare minister Norihisa Tamura said Wednesday that welfare payments to the poor will be cut across the board....

During the campaign for the general election last month, the LDP vowed a 10 percent cut in welfare payments, which have not changed since fiscal 2004....

As of last September, some 2.13 million people from about 1.56 million households were on welfare, both record highs. More than 40 percent of the households' members were 65 or older.