Japan's Prime Minister Shinzo Abe should follow in the example of William Pitt the Younger and embrace the governing mantra, "go big, or go home."

Winning a resounding victory in Japan's parliamentary elections on Sunday, Abe is now the most powerful Japanese prime minister for 70 years and able to pursue structural domestic and foreign policy reforms.

Abe's opportunity thus reminds me of William Pitt the Younger, who governed as British prime minister in the late 18th century and early 19th century. Acting decisively to make Britain's government more efficient and financially stable, and countering the threat of a rising France, Pitt laid the foundations for Britain's 19th century strength and prosperity.

Abe can follow Pitt's example.

First, the prime minister should push ahead with reforms to Japan's "self-defense forces." Due to Japan's pacifist post-war constitution, its military is currently unable to effectively stage for contingency operations against active and potential regional threats. This constrains Japan's support for defensive U.S. military operations and invites challenge from China on the South China Sea islands issue.

Yet Abe's reforms here would also nudge China to increase its pressure on North Korea. Remember, China prioritizes keeping Japan subdued in its regional military posture.

To achieve lasting benefits for his nation, however, Abe will also have to take domestic policy risks. For one, he'll have to push forwards with reforms to make Japan's economy more productive and less wasteful. This will require doubling down on existing plans to reallocate spending from Japan's generous social security system into education and child care provision. Japan's elderly population is draining far too much of the nation's wealth and in so limiting its long-term productivity potential.

That speaks to a broader issue.

While Japan's debt-to-GDP ratio is in the stratosphere, its real problem is an increasingly elderly population and an unsustainably low birth rate. If Abe doesn't fix this, Japan's economy will face a major challenge in the years ahead. But were Abe to be truly bold here, he would relax tight immigration laws so as to boost Japan's working age population.

Regardless, Abe's choice now is crystal clear: He can use his political mandate to take decisive action in both the domestic and foreign policy spheres, or he can accept mild action and allow Japan's greatest challenges to grow.