Takaichi Governs From Her Phone, and It Costs Billions

The PM Who Tweets Her Budget

Sanae Takaichi did not wait for a cabinet meeting. She did not circulate a policy paper through the Liberal Democratic Party’s policy affairs research council. On a weekday afternoon, she opened X and began posting — fourteen consecutive messages explaining why gasoline subsidies must continue, why opposing views misunderstand her, and why she refuses to treat inflation relief as optional.

The announcement was straightforward: extend the gasoline price subsidy program that has been running since 2022. But the manner of delivery was extraordinary for a country where policy normally moves through consensus organs and procedural deliberation. A prime minister, addressing the nation in numbered social media posts, bypassing her own party’s cautious members.

This is not merely a policy decision. It is a statement about how Takaichi intends to govern.

The Numbers Behind the Headlines

Japan’s gasoline subsidy scheme was introduced in April 2022 as an emergency measure against rising fuel costs. By fiscal year 2025, cumulative spending had reached approximately 8 trillion yen — roughly $53 billion at current exchange rates. The program sets a reference price of 170 yen per liter; when market prices exceed that threshold, the government covers part of the difference through a dedicated fund.

There was an obvious alternative. Rather than maintaining the 170-yen benchmark, officials could have raised the reference price to 170 yen or above, reducing the per-liter payout while preserving the subsidy’s political visibility. Instead, Takaichi’s office chose to keep the original trigger point. The cost implication is significant.

The fund is projected to run dry by autumn or early winter 2026 if the current pace continues. That timeline is already tight, and the outlook has worsened. Crude prices remain elevated amid an unresolved conflict involving Iran, and there is no near-term prospect of relief. Every month of subsidy extension brings the depletion date closer.

The Fairness Question Nobody Is Answering

The subsidy has a structural limitation that critics consider fundamental: it benefits only those who drive. Car owners, delivery fleets, and logistics companies receive the offset. Public transit users, cyclists, and those who cannot afford a vehicle get nothing from a program funded by general taxation.

Tadao Morotomi, dean of the Kyoto University Graduate School of Public Policy, put this directly. He questioned whether it is equitable for all taxpayers to subsidize automotive fuel consumption when the benefits flow almost exclusively to vehicle owners. The policy effectively transfers money from people who do not drive to people who do — a regressive outcome dressed as inflation relief.

The argument for the subsidy rests on a different logic. Japan’s consumption patterns are automobile-dependent outside major urban centers. Rural communities, aging populations, and regional businesses cannot simply switch to trains. For those constituencies, a gasoline price spike is not an inconvenience; it is a threat to livelihood. The subsidy is political insurance against that pain.

Both perspectives are true. The question is whether a program designed as temporary relief has become permanent infrastructure — and whether that permanence is sustainable.

The Fiscal Math Does Not Work

Yangzi Iwakama, a professor at the Policy Studies Graduate University, offered a sharper critique. She observed that artificially suppressing energy and food prices to buy public approval increasingly resembles the price-control mechanisms of late-stage command economies. The approach may stave off immediate suffering, but the bill always comes due.

The mechanics are plain. Japan’s tax revenue growth cannot absorb another round of subsidy spending without new borrowing. Officials have discussed using tax receipts as a temporary reserve to finance the subsidy gap, but even that approach is running out of room. Additional deficit bond issuance appears likely once the fund depletes — the very outcome fiscal hawks have warned against.

The irony is layered. Takaichi entered office emphasizing fiscal discipline and monetary reform. Yet her most visible economic action is a subsidy program that, if extended indefinitely, will require more debt to finance. The contradiction is not necessarily hypocrisy; it is the tension between political survival and fiscal reality.

What Happens Next

Three scenarios are plausible.

The first is gradual phase-out. The government raises the reference price incrementally, reducing the per-liter payout while keeping the program nominally intact. This buys time but frustrates drivers who see their subsidies shrink.

The second is accelerated depletion and crisis. The fund empties before winter, forcing the cabinet to choose between emergency borrowing and abrupt subsidy suspension. The latter would create a visible price shock heading into the holiday travel season — exactly the moment political damage is most acute.

The third is structural reform that the program’s current design makes difficult. A well-functioning subsidy scheme should encourage efficiency — higher fuel economy, electric vehicle adoption, or reduced unnecessary driving. This one does none of those things. It simply offsets price increases and preserves the status quo.

Takaichi’s X posts suggest she is aware of the criticism. She addressed doubters directly, insisting that inflation relief is not being deprioritized in favor of ideological goals. But the format of her response — fourteen consecutive posts from her personal account — reinforces a pattern of governance that operates outside institutional channels. Whether that strengthens her authority or undermines it depends on who you ask and how long the subsidies last.

Japan’s voters feel inflation daily. Their prime minister feels it through engagement metrics. The mismatch between lived experience and political calculation is where the real story lives.