A suspicious cash handoutA third universal relief grant has surfaced as a political hot potato. Ruling Democratic Party (DP) presidential candidate Lee Jae-myung is making the pitch. Lee has been a fan of universal handouts since he was the governor of Gyeonggi. When the government finally decided to exclude the rich 12 percent during the cash handouts over Chuseok, he went separate ways to dole out the money to every citizen in his province.
Upon resigning from office on Oct. 25, presidential candidate Lee called for another round of relief grants. On Oct. 29, he said he had argued for a minimum of 1 million won ($852) check for every citizen during the first handout. During an event in Goyang City, he reiterated the need for 1-million-won checks. “Relief grants have so far amounted to 480,000 won to 500,000 won per person. The sum is too small compared to our GDP and in comparison with other countries,” he said. The U.S. and Japan gave out relief grants tantamount to 1.4 percent and 2.4 percent of their respective GDP. Korea’s topped 1.3 percent. “It cannot be that our national abilities are short. It must have been a fiscal misjudgment,” he stressed. Lee plans to discuss the issue, such as time, sum and means, with the DP and financial authorities.
His plan is contested not just by the opposition People Power Party (PPP) but also the DP. The move can be perceived as a cash handout ahead of the presidential election on May 9. The DP won big in the parliamentary election in April last year by promising a universal handout ahead of the election.
Whether relief grants are really necessary can be questioned when life is returning to normal under the “With Corona” policy. Restaurant and travel bookings have surged, raising questions if debt-financed relief funding is necessary. If another round of relief grants is needed, it must go to merchants directly hit by the pandemic. Fiscal deficit ballooned under the government and national debt is expected to top 1,000 trillion won next year.
Comparison with other nations is also not right. The U.S. can print international reserve money.
Raising the issue with the election just four months away can only stoke conflict. Talk about another relief fund when stagflation is a worry cannot be suitable.