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Letters and Blogs: Cash vouchers to aid spending?
(China Daily)
Updated: 2009-01-20 07:46

Scholars seem to increasingly favor cash vouchers, which are considered as a good measure to stimulate spending.

Yet it has also raised debates. We should take account on the following points:

First, create as many jobs as possible. People can consume only after they get paid. Meanwhile, infrastructure construction in the countryside should be scaled up to facilitate farmers.

Second, improve the social security system. Only by resolving people's concerns about welfare, medical insurance, free education and other social security problems, you can persuade them to buy more.

Third, narrow the widening income gap, otherwise there can only be a few wealthy people buying many foreign luxury products while most of middle- and low-income people save their every penny.

However, handing out cash vouchers should never be an option to stimulate spending in a stable way, never mind whether to provide them indiscriminately or only to low-income people.

It may not even take effect for one time as some recipients, especially those poorer, will cut spending of equal amount once they get goods with their vouchers.

Moreover, the initiative may discourage people's determination to earn a living on their own, which has for centuries been this nation's great mark, especially in dealing with hard times.

In recent years, we have seen too many cases in which local governments take every means to apply for various financial subsidies and support. It's time to wake up in the face of these increasing signs.

Mei Xinyu

on blog.sina.com.cn

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(China Daily 01/20/2009 page9)