Hatoyama has political capital to spend-will he?

       With Japan's public debt set to bulge to more than double its GDP this year, new Prime Minister Yuki Hatoyama has little to spend - except the political capital that is keeping his support rates above 60%.
       Some pundits say that now is the time for Mr Hatoyama to make some tough decisions about delaying costly spending programmes - but with an-other election less than a year away and the economy at risk of slipping back into recession, many wonder if he will.
       Support for Mr Hatoyama's cabinet slipped eight points to 63% in a Yomiuri newspaper poll published on Tuesday,while 85% of the 1,074 respondents said they'd rather see some campaign pledges broken than a rise in Japan's already huge debt."In terms of spending priorities, it might be possible to prepare public opinion for changes in details in the run-up to the upper house election,"said Sophia University's Koichi Nakano."But it would be risky.
       "Even if the majority agree some policies are not needed and are worried about public finances more than mani-festo commitments, there is not necessarily agreement on what is not necessary."
       Mr Hatoyama's Democratic Party of Japan swept to a huge election victory in August pledging to cut wasteful spending and put more cash in the hands of consumers and workers to stimulate growth at home. But falling tax revenues due to the fragile economy, and a public debt seen topping 200% of gross domestic product this year are making it hard to find funds.
       Mr Hatoyama's high support could give him a window to put off keeping some expensive promises, such as an unpopular plan to make highways tollfree or ending a decades-old surcharge on gasoline that will cost the government 2.5 trillion yen ($27.81 billion) in lost tax revenues annually.
       But analysts say taking voters at their word could backfire ahead of the election for parliament's upper house set for mid-2010."Whatever policy is targeted, someone will say 'That's not what I meant',"said Mr Nakano of Sophia University.
       A poor showing in the upper house election could revive a parliamentary deadlock and stall policy implementation, and a failure by the Democrats to win an outright majority would leave them beholden to two small but vocal coalition partners.
       Holding down spending could also risk sending the economy back into re-cession, given the fragility of its recovery from Japan's worst downturn."They can't address the state of finances at a time like this," Mr Nakano said. And focusing on the market-friendly reforms some economists say are needed could be a tough-sell given Mr Hatoyama's promises to voters to pursue a kinder,gentler capitalism.
       Mr Hatoyama has also pledged not to raise Japan's 5% sales tax for the next five years, although most economists say a rise will be needed to cope with the increasing social security costs of the world's fastest-ageing population.
       "There are no good choices here,"said Robert Feldman, chief economist at Morgan Stanley in Tokyo.