A jobless man walks with his belongings at a park Friday in Tokyo. Japan’s unemployment rate rose to an all-time high in July, deflation intensified and families cut spending, a triple dose of bad news for Prime Minister Taro Aso as his party heads for almost certain defeat in Sunday’s parliamentary elections.

Tokyo ? In one of the most heated political contests in recent memory, Japan’s opposition party is courting voters with an enticing promise: monthly cash for kids.

By giving families 26,000 yen ($275) a month per child through junior high, the Democratic Party of Japan hopes to ease parenting costs and encourage more women to give birth in a country where the rapidly aging population is among the gravest long-term threats. Parents are already given a lump sum of 350,000 yen ($3,700) for the birth of each child.

The program is the centerpiece of a plan to steer the world’s second-biggest economy to the left, away from what opposition leader Yukio Hatoyama describes as the “fundamentalist pursuit of capitalism” that he says led to last year’s financial crisis.

If the Democrats dethrone the ruling Liberal Democratic Party as is widely expected in parliamentary elections Sunday, they vow to put people — not Japan Inc. — at the core of their economic policy.

That would represent a significant change for Japan, which for decades has prioritized industrial interests in the drive to propel the country from its defeat in World War II to its current position as a world economic power.

Koichi Nakano, a political science professor at Tokyo’s Sophia University, describes the Democrats’ vision as a fundamental departure from the economic model of the past.

It would be, in effect, an acceptance that Japan is waning as a global economic leader and needs a more people-centric approach to deal with the issues it now faces.

Those problems stem from a shrinking and aging population. Japan’s population of 127.6 million peaked in 2006, and is expected to decline to 115 million in 2030 and fall below 100 million by the middle of the century.

The younger generation will need to bear an increasing burden to care for swelling ranks of senior citizens, even as they watch the promise of lifetime employment fade. On Friday, the government reported that the nationwide unemployment rate hit 5.7 percent, the highest level in Japan’s post-World War II era.

“There are people who still want Japan to be able to compete in the big leagues,” Nakano said. “But others think that Japan is destined to decline, and it becomes a question of managing that decline now that China is such a big power.”

Whether the Democrats can actually pull it off is the big question.

In addition to the child payouts, they propose an expensive menu of initiatives: toll-free highways, free high schools, income support for farmers, monthly allowances for job seekers in training, a higher minimum wage and tax cuts. The estimated bill comes to 16.8 trillion yen ($179 billion) when fully implemented starting in the 2013 fiscal year.

That may be too much to handle for a country with a massive fiscal deficit. The Organization for Economic Cooperation and Development predicts the country’s public debt, already the highest among member countries, may reach 200 percent of gross domestic product next year.

The Democrats have said they plan to pay for all the new social spending, which amount to about 3.5 percent of GDP, by eliminating wasteful public works, streamlining the bureaucracy and tapping into hidden financial reserves.