Between 2001 and 2006, Japan aggressively tackled fiscal problems by creating a smaller government and setting clear numerical targets for fiscal consolidation, including a primary budget balance in 10 years. If this effort had been continued for about two more years, a primary budget surplus could have been realized.

But over the past three years, a populist trend in fiscal expenditure has taken hold. What is needed most now is for Japan to restore comprehensive economic management. A tax hike is only part of that.

Without a strategy for growth, an effort to reduce government spending, and a policy to stop deflation, a tax hike will not solve the problem. Indeed, some economists fear that a fiscal crisis could erupt even after a tax hike is passed.

Once that happens, the impact on neighboring countries - and on the world economy - will be huge compared to the current European problem. After all, Japan remains the world's second largest economy, accounting for about one-third of Asia's GDP, and 8 percent of global output, whereas the GDP share of Greece in the EU is about 3 percent.