Almost every adult to get US$292 (RM1,274)?

Almost every adult to get US$292 (RM1,274)

Thailand’s new Prime Minister is Paeteongtarn Shinawatra. She is the daughter of former leader Thaksin Shinawatra. The biggest news for Thai people would be the planned handout of US$14 billion in cash by the Thai government to turbocharge an economy which has been lagging the growth of its neighbors. Briefly, in order to push the economy to move faster, the cash handout will be given so the people so that they could spend the money on goods and services in the country.

Article in freemalaysiatoday.com Thailand’s new leader Paetongtarn Shinawatra reaffirmed her commitment to keep much of her party’s controversial plan to hand out 10,000 baht (US$292) each to almost all adult Thais, and said her cabinet lineup is ready.

The 38-year-old daughter of former leader Thaksin Shinawatra said the government is currently refining details of its cash handout plan.

The programme, originally designed to boost incomes and turbocharge an economy lagging the growth of its neighbours with roughly US$14 billion of cash, has been criticised for its cost, funding source, and the broad coverage.

Thaksin last month said his daughter’s government will tweak the cash gift programme and focus on providing financial relief first to the most needy. A week before that, the local media reported that Thaksin had advised his daughter to abandon the plan. Do read the article in full here: Article in freemalaysiatoday.com

Why do governments sometimes give money to their people directly? For example, cash handouts?

“For example, in the United States, stimulus checks of up to $2800 were given to US citizens as part of the government’s  plan to combat Covid-19. Similarly, in Hong Kong, cash stipends worth HK$10,000 were given to their residents. The Canadian government is also providing CAD2000 per month for up to 4 months to eligible citizens who have been terribly affected by the pandemic. Hence, what are the key benefits of cash handouts that governments around the world are willing to spend billions of dollars on?.” Source: flymalaysia.org

More money, higher demand for goods

When everyone spends the money given to them, then the demand for goods would increase and this will propel the economy forward. This is what is known as the multiplier effects. Thus, governments give because they want people to spend. We have to note that if the handout was given to someone who will not spend the money, then this defeats the whole idea of handout in the first place. This could also happen if the people felt that it’s better to save the money instead of spending it. Hopefully, the identified group will all be looking forward to spending the money.

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