Question

The government of Thailand has issued a decree to pay a stimulus check to every person who lost a job due to the COVID-19 crisis (and qualified under other criteria). What was the economic consideration under such policy? What would be the main channel for the economic effect? What would the effect be on consumption and saving if instead of such policy the government would have cut taxes?

Answer 1

Answer: Durin COVID-19 many people loss their job , government have taken different measures to give some advantage to the economy . Government have been taken different monetary as well as fiscal policy to reduce the effect of job loss. Government have cut down extra spending and also cut down the taxes , Although this was the immediate measure that have been taken by the government but due to this this will create imbalance in the budget. Many goveernment have extended the tax paying date to give some relief to tax payers . Government in Thailand focusing to create skill in people which will also help to generate employment. Government in Thailand have been taken necessary measures to stabilise the liquidity problem. There were low interest rate have been provided for non banking sector . By doing so they can prodide large amount of loan and this will benefit to create larger amount of credit . This is best measure to help the economy to grow further. The deadlines for tax payment also extended. employment subsidies given by government. . In Thailand government transfered cash to the vulnerable people who suffered alot during COVID-19 . If government take only tax cut cut as a measure to reduce unemployment than that will help people to some extent . But to suppliment all the policies to only tax cut is not favorable at all. Here due to tax cut people will have more money to save income and also have more income to consume . so tax cut will increase saving and consumption .