New LDP president Shinzo Abe has formed a powerful and active caucus of his party. Under the leadership of the top team, the LDP is expected to maintain policy oriented politics promoted by the former chef Koizumi.
The LDP and the Democratic Party of Japan, DPJ are required to compete with each other through lively debates on policy issues in public for the reigns of government. It will bring two-party system in the Japanese society in the end.
The LDP did what they had never done before. They prescribed a bitter pill for the state. Cut in annual expenditure was definitely written in the 'Basic Policies for Economic and Fiscal Management and Structural Reform 2006'. It helps them to get a good grade in the Keidanren's latest survey. The DPJ and Keidanren cannot agree with each other on policy toward some key issues such as energy and global environment conservation. The evaluation shows it.
Radical cut in annual budget should come first. Continued economic growth can give revenue increase in the future. It is the best scenario. Nevertheless, the nationwide public debt will still remain 150% of the GDP in 2010's and consumption tax hike will be needed to cover the shortage like it or not.