Letters | Why Hong Kong consumers need to spend handout vouchers on ‘useless’ things

If we spend the vouchers on necessities to save our money instead, there is no net consumption boost to the economy. For the sake of society, we must spend

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Shops in Mong Kok get ready with the payment systems for the Hong Kong government’s HK$5,000 consumption voucher scheme on July 10. Photo: Dickson Lee

Published: 6:15am, 18 Jul 2021Updated: 6:15am, 18 Jul 2021

Many Hong Kong citizens will receive the first batch of their consumption vouchers next month. Before you decide where to spend these vouchers, I would like to argue for the case that to benefit the collective by stimulating the economy (which is the rationale of this policy), we must spend these vouchers on unnecessary products. Here’s why.

Traditional Keynesian economics argues that the economy could be boosted if its aggregate expenditure (which includes consumption expenditure) increases. Therefore, to stimulate the economy, we must increase our consumption expenditure by spending the vouchers on things we normally would not spend on. This could be getting a designer bag as opposed to an ordinary one, or maybe buying a higher quality piece of fish from the market.

Well, if you are more of a fan of Thomas J. Sargent and Neil Wallace, you are likely to dismiss what I’m saying here entirely.

In fact, if you’re a stringent believer in new classical economics, you should not register for these consumption vouchers so as to minimise the degree of government intervention!

06:35

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I understand that some people may think that it is better to spend these consumption vouchers on necessities so they can save the money. But we live in a society and we should not retreat into excessive individualism.