The first year of Shinzo Abe's second term as Japan's prime minister was a domestic political triumph, but his country has paid an enormously high price for it in its long-term economic policy and standing in Northeast Asia. Prospects for peaceful cooperation and understanding in the region have taken a battering which will take years to repair.

In domestic politics, Abe broke the curse of every failed, toothless prime minister since Junichiro Koizumi retired after a full five-year term back in 2009. Abe won a successful Upper House election, restoring his long-moribund Liberal Democratic Party to a commanding majority there for the first time since 2007. His stimulus spending policies have given a short-term and badly needed boost to the Japanese economy. And Japan's success in winning the main 2020 Summer Olympic Games for Tokyo has restored a swagger and confidence to his people they had not experienced since the start of their long economic stagnation a quarter century ago.

However, these successes have come at a fearful price, both domestically and economically. Abe's deficit-stimulus spending program recalls the reckless policies that drove Britain to ruin in the 1960s and 1970s under the long-discredited governments of Harold Wilson and Edward Heath.