제 9 호 Stimulus Check: The Double-edged Sword of the Pandemic Era
Stimulus Check: The Double-edged Sword of the Pandemic Era
by Nam-HoYun, Reporter
Since May of 2020, the government had given stimulus check to the people for 3 times. Politicians are discussing about the 4th stimulus check for selected people. Some say that it is a bait to get more votes by giving people money, while some say it is the best way to help out people who got hit hard by the global pandemic. As more and more people are opening their eyes to this idea, arguments surrounding the stimulus check seem to be unavoidable. Will it be a gift box everyone desperately needs or a Pandora’s Box that will bring us new conflicts and problems?
Supporters: “Stimulus Check is Not an Option”
No one is safe from the global pandemic yet. At the same time, it is hurting the vast majority of people both mentally and financially. That is why the supporters believe that the government should actively intervene and help their citizens. As of May 10, during the first stimulus check period, the Korean government had spent 2.2% of its GDP. Japan had spent 22%, 13% for the U.S, and 12% for the Swedish government.
Plus, as of the third quarter last year, Korea’s national debt was 45.9% compared to GDP, while the average of advanced countries was 131.4%. The U.S was 127.2%, Japan was 257.2%, and the U.K was 130.1%. Korea’s national debt ratio was even lower than China with 63%. The lower the percentage is,the more the government can unpack their money to aid people.
Lastly, there are many people who need financial support. The rate of self-employment in Korea was a quarter of the total employment in 2014, and it kept going up. However, the number of self-employed is decreasing. Most of them are in debt. They are in need of money and support. Supporters firmly believe that the government should step in and give stimulus checks.
Opposers: “Stimulus Check is Just a Mirage”
Opposers do not think it has a positive effect. They believe it creates other problems. First, household debt is increasing in spite of stimulus checks. According to the Institution of International Finance, in the third quarter of last year, Korea had 100.6% household debt ratio compared to GDP. The average of advanced countries was 78%; the U.S. was 81.2%. In other words, more and more people are carrying their increasing debt on their back.
Second, the way the government selects who they are going to support is vague. For instance, the self-employed person who had more than 5 employers could not get the third stimulus check last year. Likewise, people who opened up a store after November of 2019 were excluded. There was an irony going on among the people who needed the check, but could not.
Finally, opposers say that it makes people more divided. The first stimulus check was for every citizen. The second and the third one were for certain people like self-employed. Some criticize the amount of money (3 million Won for businesses that were banned, 2 million Won for businesses that were under restrictions) they gave to the owners. Owners who had more than 2 businesses could only get one stimulus check. Without more precision and study, stimulus check will not stimulate people and the economy.
You have to keep in mind that there are studies and documents that are significantly different. Some experts suggest positive effects of the stimulus check while some say the opposite. While there will be arguments regarding the next stimulus check, people have to realize the problems others are facing right now. We, as a society should find our way out even though it is not in the form of a stimulus check.