Wanton Cash Handouts Are Making Everyone Poorer

      October 28, 2019 13:53

      The central and provincial governments have doled out W42 trillion in cash to senior citizens, young mothers and young jobseekers, more than doubling in just two years (US$1=W1,174). Those handouts are not drawn from pension or other funds but are purely cash payments. A total of 12 million people have received them, which boils down to one in four Koreans and 43 percent out of 20 million households in the country. It cannot be the case that nearly half of the population are in need of welfare.

      The central government took the lead, and provincial governments have followed suit. There are now some 1,670 different types of such cash handouts. The Seoul city government recently announced a plan to give W600,000 a month in youth unemployment allowances for up to six months with a budget of W330 billion over the next three years. Ansan in Gyeonggi Province promised to award W2 million in tuition fees a year to all university students in the city. Free school lunches, uniforms and school trips became the norm a long time ago. The central government already provides pensions to senior citizens, but some provincial governments are giving additional handouts to reward "longevity" and other distinctions. Some provincial governments even offer cash handouts for real estate purchases and cleaning up your own waste. This is simply a cash-handout frenzy.

      Welfare spending will increase 35.4 percent in next year's fiscal budget. During the three years of the Moon Jae-in administration it has grown by W52 trillion, which is the same as during the previous two administrations' combined. Due to the failure of Moon’s “income-led” growth policy, the actual amount of money the bottom bracket of wage earners make has declined, so the number of households that receive welfare payments has grown 24 percent over the last three years to 10.27 million. The government has made people poorer and is now having to pay them public money to make up for it. That is how Latin American and South European countries have gone bankrupt, and the same could happen to Korea.

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