In a recent post on X, Minister of Economy Rafizi Ramli playfully addressed the suggestion made by Wan Ahmad Fayhsal, the Parti Islam se-Malaysia MP for Machang, that the government should print money and distribute RM1 million to every Malaysian family to alleviate economic woes. Rafizi's critique not only sheds light on the impracticality of such proposals but also emphasizes the complexities of economic management.
Rafizi began by questioning the logic behind giving each family RM1 million, suggesting that while the idea sounds appealing, it is fraught with significant consequences. “If every family received RM1 million, poverty would seemingly vanish overnight,” he remarked, noting that families would likely spend the newfound wealth, driving consumer demand and boosting businesses. This, in turn, could lead to increased government revenue through higher taxation from thriving enterprises.
However, Rafizi quickly pivoted to the reality of the situation. He highlighted that implementing such a plan would require a staggering RM8 trillion, calculated based on Malaysia's 8 million households. “If we printed this money, it would lead to runaway inflation, devaluing the ringgit to levels reminiscent of ‘banana money’ during the Japanese occupation,” he explained. This historical analogy underscores the perils of excessive money printing, which can destabilize an economy.
Moreover, Rafizi pointed out that borrowing such a vast amount would push the national debt to a staggering 500% of Malaysia's GDP. He emphasized that no lender would entertain the idea of extending credit under such conditions, effectively making it an impossible option for the government. Even if the government attempted to raise this amount by issuing bonds, the interest rates would likely soar to around 20%, resulting in an annual interest payment exceeding RM1 trillion—more than double the country's revenue.
Rafizi further elaborated on the broader implications of distributing RM1 million to every family. He posed a thought-provoking question: “If everyone were a millionaire, who would actually work?” This scenario could lead to a significant decline in productivity, as businesses would struggle to find employees, ultimately resulting in closures and economic downturns.
The minister's commentary serves as a reminder that while some economic proposals may appear attractive at first glance, they often lack the necessary groundwork to be feasible. Rafizi’s critique of Wan Ahmad Fayhsal’s idea is not merely an attempt to discredit a political opponent; it reflects a fundamental understanding of economic principles that prioritize stability and sustainability over quick fixes.
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