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Enter 2020.09.16 11:40
Analysis of “The local currency does not have a significant effect of regional economic revitalization”
Lee Jae-myung “I’m so stupid” “I lose my blood tax” “Strict reprimand”
Promote a ‘basic income’ policy using local currency
Apparently concerned about damage to the ‘Basic Series’ before the presidential elections
On the 15th, Gyeonggi Governor Lee Jae-myung criticized the Korean Tax and Finance Institute, a state-run research institute, using a primary color expression of “false”. This is because the Institute of Taxation and Finance said that local currencies do not have the effect of revitalizing the economy and only incur losses and costs. Governor Lee wrote three Facebook posts in six hours to criticize the report.
Governor Lee insisted that “the local currency is a promise and a central policy of the Moon Jae-in government” and that “government research institutes that undermined government policy must be severely reprimanded.” Yet in the political world, analysts say Governor Lee is responding forcefully to arguments that may undermine the foundations of his “basic income” that he has argued before the presidential election.
In the report ‘Influence of the introduction of local money on the local economy’ published by the Institute of Tax and Finance, associate researcher Song Gyeong-ho and Lee Hwan-woong used data from a total survey of companies across the country from 2010 to 2018 and analyzed 35 million data to analyze the economic effect of the local currency. It was empirically analyzed.
As a result, he said, “there was no significant effect of activating the local economy by issuing local currency. Only neighborhood markets and grocery stores, which have a competitive relationship with hypermarkets, showed higher sales in local currency and no significant sales increase effect was observed for other industries.
The Institute for Taxation and Finance also said: “By preventing consumer spending from moving out of the region, you can increase the sales of small business owners in the region.” Said. Consequently, it was analyzed that if local currency is issued so as not to suffer damage in all regions, “the well-being of the entire community will be less than when local currency is not generated.”
Local governments are issuing local currency and using methods such as selling it at a price lower than face value to promote its use. It sells vouchers of 10,000 won, which are local currency, for 9,000 won. The Tax and Finance Institute said, “900 billion won is expected to be spent this year just to subsidize the difference by the government.” Of the 900 billion won subsidy, the net economic loss that could not lead to consumer welfare is estimated at 46 billion won. Additional expenses, such as gift certificate printing and financial fees, were estimated to be around 180 billion won this year. There is also the cost of cracking down on ‘cash gangs’, who make the difference by selling local currency vouchers to local markets rather than using them in local markets.
When the content of this report became known through the media, the governor strongly opposed it. In an article titled “A Stupid National Policy Research Institute Outperforms Government Policies Without Evidence,” published on the afternoon of the 15th, Governor Lee said, “Local currency is the best economic policy for people to feel like saving alleys and improves public solidarity. ” “Welfare expenses paid in local currency, not cash, have multiple effects of increasing sales and inducing production for small business owners in addition to welfare benefits.” “I said. The government research institute also said,” It’s a waste of the national blood tax. “
In another article published that night, Governor Lee said: “It is a state research institute that criticizes the local currency, one of the central promises and policies of the Moon Jae-in administration, with the situation of the local currency before 2018 , before the local currency was properly set. “I’m really concerned about the stubborn attitude of the economic bureaucrats.” The Institute of Taxation and Finance published a report analyzing data from 2010 to 2018, but the study period was inappropriate.
An hour later, Governor Lee published another article titled “5 Reasons Why The Tax and Finance Institute’s Announcement Downgrading Local Currency Was Stupid.” △ The main promise and main policy of the Moon Jae-in administration, the local currency, was completely denied △ The study deals with the local currency between 2010 and 2018, before the Moon Jae-in administration implemented the local currency △ Disappear that it was a waste of budget for all citizens to experience utility △ Contrary to the research results of Gyeonggi Institute of Local Administration and Research of Korea.
The reason Governor Lee criticized the Tax and Finance Institute was that “local currency is the primary policy of the Moon Jae-in administration.” However, it is interpreted as trying to block in advance a rebuttal that could weaken the foundations of the ‘basic income’ that Governor Lee, who is the number one candidate for the next presidential election, is claiming. The governor proposes “basic series” such as “basic income”, “basic housing” and “basic loan” as his main policies.
“Basic Income” is a slogan Governor Lee insisted on when he served as mayor of Seongnam and imprinted his name on the people. Since 2016, the city of Seongnam has implemented a partial basic income policy, ‘Dividend for Youth’. The policy is to provide a local currency, Seongnam Love Gift Certificate, from 1 million won each quarter to 250,000 won each quarter to 24-year-olds residing in Seongnam City. This policy caused much controversy in the political world, but it helped raise awareness of the governor.
Governor Lee recently took issue with the government that subsidies for the second disaster should be paid to the entire country in lieu of the detection method. Although he accepted the selective payment, he wrote: “It is clearly visible to me that the resentment and betrayal of the Moon Jae-in administration and the Democratic Party are spreading like flames.”
However, a week later, the Institute of Taxation and Finance published a report stating that “the local currency is not effective.” Governor Lee wrote: “A strict investigation and censorship is absolutely necessary as to whether the Tax and Finance Institute, which selects and studies projects through consultation with the Ministry of Finance, presented the results of the study at this time.” Beyond the Institute of Taxation and Finance, he directed the arrow of criticism to the Ministry of Strategy and Finance.
Deputy Prime Minister of Economy and Ministry of Strategy and Finance, Hong Nam-ki, told the National Assembly committee in June that “disaster subsidies should be paid by selecting the difficult class, not the whole country, and against income basic”.
