IS THE NATIONAL GOVERNMENT REGULATION ON LOCAL LOANS NECESSARY?

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I think, in Japan, National Government regulations on subnational government loans are necessary because of following 3 reasons.1.The size of subnational governments expenditure all over Japan is about two times larger than that of national government. So in the time when business condition is very dull, and some expansionary fiscal policy is needed, subnational governments expenditure should be increased under the direction of national government. In Japan, we can not expect a successful fiscal policy without the increased subnational government expenditure financed by loans.2.In Japan, the national government subsidizes subnational governments of poor area when they refund their loans. So, local loan is a kind of aerial redistribution policy in Japan and should be controlled equitably by the national government.3.Until about 20 years ago, each ministry of national government had exerted severe controls on subnational governments through their specific purpose grants. But recently, specific purpose grants are gradually substituted by loans of which redemption are subsidized by general purpose grant. But the amount of the general purpose grant is limited. So the control of national government on the amount of local loans becomes necessary.