Deflation to the left of me, Deficit to the right, here I am stuck in the middle with you.

Highlighting Japan's dilemma and its limited options to tackle the possible onset of a third lost decade, Japan has extended its "eco-boost" point program. The basic premise of the program is to get its consumers to spend and trade-up their old durables consumption goods (stuff like TVs, washing machines, etc) for newer more energy efficient models. In return, consumers spending on energy efficient items are rewarded with eco boost points that if accumulated, can return them a shopping voucher (which in turn means more spending!)

I like this idea on two counts: 1) its trying to stimulate its consumer spending which in turn will help its economy along, and 2) getting its whole economy to trade up to energy efficient models means that in the long run, Japan could potentially cut its energy costs and perhaps reduce a portion of its spending on energy security and/or it gives the government the flexibility to implement future carbon taxes on a generation who would already have less energy wastage; thus making the new tax burden less onerous (well this is an optimistic view... )

my gripe is that the program is on consumer durables. Meaning that if i've already traded up and got a new washing machine, I'm unlikely to trade up so soon again. So it seems like extending this program in Japan has little merits. It's not going to result in a sustained increase in consumer spending in Japan but more like a one time blip. Its a nice idea, but i think they still haven't gotten to the heart of permanently increasing spending in Japan.