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A FINANCING STRATEGY FOR STIMULATING JAPAN (int'l edition)''A talk with Treasury Chief Rubin'' (Special Report, Oct. 12) closes with Secretary Rubin's view that all should try to contribute to stimulating Japan's economic growth. Just as it is a known folly to print money to fuel ongoing inflation, it could be wisdom to print money to check ongoing deflation. Perhaps the most reliable way to get the printed money into circulation would be to deposit it to the credit accounts of wounded Asian economies, with the proviso that the deposits only be drawn down to pay for imports of Japanese goods or services, thereby stimulating production and employment in Japan and in the countries benefiting from the grants-in-aid. This financing device could encourage much larger aid programs than might otherwise be provided. Of course, the Japanese banking problems also need to be addressed. However, as the pileup of unused lending capacity in the U.S. banking system in the late 1930s demonstrated, ample credit availability will not induce people or businesses to borrow and spend unless they feel optimistic about their future and see good uses for the money.
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Updated Oct. 22, 1998 by bwwebmaster
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