Reincarnated as Nikolai II

Chapter 277: The Union of Broken Bones (11)

Bank of Japan Governor, member of the House of Peers, member of the House of Representatives, and current Finance Minister with the title of Baron, the "Mayfly Prime Minister" Takahashi Korekiyo.

He was clearly a member of the Rikken Seiyūkai Party and, if one had to choose, should have been in a position to support the Control Faction.

However, just as not all decisions are made based on factional logic, he also made many decisions that went against this Control Faction.

A prime example was military disarmament.

"This country has already become one that survives through diplomacy. Even if we're divided internally, we must not be divided when facing the outside world."

Perhaps among cabinet members, he was the one who rejoiced most at the London Naval Treaty.

The military is a monster that only consumes money.

The past 25 years of Japanese history show all too well the consequences of wielding that military incorrectly.

Therefore, the Japanese Empire's role in the international community should be positioned precisely as a helper.

A foothold for America to project power in Asia.

A supporting force when the British Empire wants to maintain influence in Asia.

And a partner when Russia devours China.

Simply put, neutrality.

This country must now maintain neutrality.

It already abandoned the gold standard last year. This means that despite the many years spent repaying bonds, they're now implementing massive deficit operations.

The price for that is:

"Why does the Finance Ministry always think about cutting the military budget? Why don't you understand that this country exists because of us?"

"There's no money! Simply no money!"

"Supporting farms, fine! Tax cuts, good! But I cannot tolerate mistreating our hardworking warriors! We'll implement our own budget procurement. I trust you won't stop the military from receiving voluntary donations!"

"..."

The resentment of those who share the goal of constitutional monarchy.

After making such one-sided declarations, the military actually placed donation advertisements in newspapers and received donations.

Setting aside the oversight and accounting of those funds, the navy, which had been struggling under fiscal austerity, seemed ready to dance to the tune of donations after finally seeing ships on docks again.

Another side effect was the increase in political burden.

"So which side does the Rikken Seiyūkai Party and the Finance Minister support in this Prime Minister assassination crisis?"

"Prime Minister Makoto, how could I support such a heinous crime? I only hope they receive proper legal punishment."

"Minister, no, my friend Korekiyo. You know I'm a survivor of the Russo-Japanese War, right?"

"...I do know. Weren't you a Navy Admiral?"

"Then you must know why I became Prime Minister? Prince Saionji Kinmochi put me in this position to prevent a military regime from taking power. For that reason alone."

It was good that his close friend had become Prime Minister, but he was a figure closer to the Imperial Way Faction.

As Makoto said, the reason he was in that position was due to the shock brought by the coup.

To prevent such incidents from happening again. Also to prevent the military's rampage.

However, Korekiyo couldn't easily respond to Makoto's words.

'...In other words, it means nothing will change.'

Why did those young men stage a coup? Furthermore, why did the public support such an inhumane coup?

Isn't it because everyone thinks this country needs to change somehow?

Makoto's words, which seemed to say there would be no change, weighed on Korekiyo's heart and sealed his lips.

"I know what you're worried about. But the empire just needs a little time. In the end, with you here, we'll overcome this economic crisis too. I have no doubt."

"...I must make it so."

"Thank you. Having you in these difficult times puts my mind at ease."

He was merely making an excuse, promising to try his best.

But just as making promises doesn't change the situation:

"So how long can the current imperial government continue deficit financing with its capacity?"

"Such fiscal soundness eventually returns with time. Deficit financing is just a temporary remedy, never a solution. If we can't find a breakthrough, it's close to a gamble worse than not trying at all."

For now, they're covering the gap between revenue and expenditure with national bond sales, but this is ultimately debt for economic improvement.

What if the economy doesn't improve despite doing this?

"So we need to find a solution as soon as possible. Deficit financing is a time bomb."

Then, returning to the past, the imperial government would have to repay bonds for 20 years.

A cabinet riding the tiger of deficit financing.

Was this how former Prime Minister Itō Hirobumi felt when he founded the Rikken Seiyūkai between hardliners and moderates?

Korekiyo, who had witnessed the results of the Russo-Japanese War initiated by Prime Minister Itō more closely than anyone, only prayed that this country would not be devoured.

==

Whether people's thoughts are all similar, the governments of various countries that had adhered only to deflationary policies begin the new year of 1933 showing different movements.

Keynesian economics wouldn't have settled everyone overnight, but after trying all kinds of remedies for the past four years with no economic improvement, they might be choosing to increase debt instead.

"High-interest bonds are pouring out everywhere."

In stark contrast to centuries of prioritizing budget surpluses, or at most balanced budgets, the market is now flooded with government bonds.

Nevertheless, not all government bonds are valuable.

A representative example is Japanese government bonds.

They're flooding them both domestically and internationally, but... they're not selling.

"It's understandable that government credibility would decline when sentences come out too light after a Prime Minister's assassination."

"Are you saying internal strife has affected their finances?"

"That's part of it. They've judged that there's no way to break through this depression from foreign sources either."

In truth, it's the United States that's strange for calming the depression through fiscal policy alone, even with its unlimited weight class. With its vast resources, manufacturing capacity, and domestic market, America stands as an anomaly among nations. The solution to this depression has similar threads everywhere else—countries seeking expanded markets and resources through territorial control rather than purely financial mechanisms.