Completely wrong.

Have you ever considered the reason why JAL, a profitable company until recently, has posted huge losses (along with most other international Airlines, e.g British Airways)? Yes, that’s right, it’s to do with the state of the economy. If JAL disappear, think of all the other companies that would go too. Food companies, service companies, manufacture companies, the list goes on. JAL has huge contracts with a multitude of smaller companies, contracts that those smaller companies rely on for survival. Everything has a knock-on effect, that’s how business works.

First think about economic basics before making uneducated posts about government handouts.

@Eddie & Vonskippy
[NOTE: I am an economist -- with a degree]
You are both (partially) correct. Eddie is correct relative to the short-term (the next 1 or 2 years) and Vonskippy is correct in the long-term (after 2 years).

The Japanese government is employing an economic strategy called Keynesianism. The (vastly oversimplified) explanation of this methodology is that economic recessions based on consumers’ lack of confidence in the marketplace can be reversed by (temporarily) flooding the economy with money. It is hoped that the flood of money will spur economic activity and thus end the recession. Once satisfied that the recession is over, the government would (do something like) tax the wealthy and get the flood of money back (cuz if they don’t the flood of money might cause another economic malady called “inflation”).

Keynesianism looks great on paper, the problem is that it relies on a government entity that can obtain *absolute* control over the markets. Singapore has this kind of control; so does China for the most part. Japan, the U.S., Australia, the U.K. and many other first world nations do not (thank God). In the long-run, like Vonskippy said, Japan will experience higher prices (inflation) and more nominal fees (taxes) making life generally more difficult to live for those who aren’t wealthy enough to stay ahead of it.

In the long-run, mis-managed companies going out-of-business is a good thing. It clears the path for new market participants with better ideas and stronger management skills. Since Japan is propping-up JAL, these innovators can’t operate. No one can compete with an entity (like JAL) that can have the government print all of the money it (JAL) needs.

I might add the other big problem with Keynesianism is that it relies on a government to have the control to spend like crazy when needed to get the economy moving again, and then cut spending drastically once the economy does get moving again, so as to recoup the money spent previously by having tax receipts greater than expenditures.

The obvious problem, which all Keynesian economists seem to overlook, is that no government has ever shown itself ready to drastically cut spending once it gets a taste of having free rein over the nation’s pursestrings. Not to mention that if a politician has successfully injected government money into his district to pay for public works projects or whatever, if he then tries to cut that funding he will almost certainly promptly be voted out of office in favor of an opponent who favors keeping the tap turned on, thereby creating politicians with a vested interest it throwing government money around.

In short, Keynesian economics is like a lot of theories dreamed up by people wh spend all their time thinking instead of observing the real world: it looks great in theory, and might actually work if it wasn’t for this annoying little thing called “human nature”. And of course, proponents would tell you the problem isn’t with the theory itself, even though it ignores the largest and most influential variable. No, the problem is with the humans who, damn them, refuse to set their true nature aside and follow the clearly perfect theory Keynes laid out.