GAG FOOLISH AHMAD FAYHSAL AFTER SHOCK PROPOSAL FOR BANK NEGARA TO PRINT MORE MONEY TO HAND OUT AS CASH AID DURING RECESSION? BUT IS SIMPLETON MINISTER JUST THE ‘VOICEBOX’ FOR HIS ‘QUICK-FIX’ PARTY BOSSES MUHYIDDIN & AZMIN?

KUALA LUMPUR — A DAP MP today urged Prime Minister Tan Sri Muhyiddin Yassin to openly reprimand Deputy Youth and Sports Minister, Wan Ahmad Fayhsal Wan Ahmad Kamal.

In a statement, Bukit Mertajam MP Steven Sim Chee Keong said Muhyiddin should order Wan Ahmad to retract his proposal that Bank Negara Malaysia (BNM) should print more money and directly hand the cash to Malaysians.

The deputy minister made the suggestion during an interview with business radio station BFM yesterday.

He also urged Muhyiddin to gag Wan Ahmad from speaking on economic-related issues.

“No economic idea is worse than printing money because ultimately, our currency will not be even worth the value of the paper it is printed on. To protect the value of our currency and assure investors of the economic competence of the government, the prime minister must immediately reprimand and instruct Wan Fasyhal to withdraw his irresponsible remarks and stop talking about the economy.

“Germany is the classic example of how printing money after the Great War led to hyper-inflation, the collapse of its economy and society, leading to the rise of fascism, Nazism and Adolf Hitler. Those who read history should know what happened to the world with the horrors brought by Hitler.

“Wan Fayshal’s suggestion to print money displayed his economic naiveté. He ignores basic economics of the disastrous consequences of loss of confidence in the monetary system, hyper-inflation and the ultimate collapse to the economy,” Sim said.

He pointed out that money supply can be increased not through its printing but through quantitative easing (QE) by buying bonds or purchasing assets, adding however then even QE measures must be used judiciously and are ineffective in a low interest rate regime.

Sim said that the problem at present is not to do with funding, but the government’s overtly conservative approach towards spending.

He added that the passing of the Covid-19 Bill in the Dewan Rakyat, which included the raising of the debt ceiling, is a signal to the government that “we are willing for the government to borrow more to fund a higher deficit.”

“My advice to Wan Faysal is, he should instead focus on the Youth and Sports ministry which is about to receive nearly 20 per cent budget cut in the 2021 Budget. This is definitely bad news to the youth and sports sector, amidst the triple blow health-economic-political crisis we are facing,” Sim said. – MALAY MAIL

‘Printing money’ – Fayhsal says critics don’t understand, make false assumptions

Youth and Sports deputy minister Wan Ahmad Fayhsal Wan Ahmad Kamal has defended his proposal to help the people by forgiving debt and “printing money”.

Taking to Facebook yesterday, Wan Ahmad Fayhsal said his critics had “misunderstood” his points and made false assumptions.

“Many misunderstood when criticising forgiving debt and money creation which I talked about on BFM,” he said.

“Honestly, this is a technical topic and needs further discussion on the origins of money and modern banking.

In the BFM radio interview on Monday, the deputy minister proposed a “helicopter money” policy “where the central bank can directly print money and give it to the people so that they can spend it”.

Former PNB chairperson Jalil Rasheed in a separate tweet said that printing money would devalue the ringgit and that such money creation policies were only feasible in the US due to the dollar’s demand and strength.

Fayhsal, in defending his suggestions, shared a Bersatu Youth Economic Bureau post which cited modern monetary theory (MMT) experts as saying that printing money wouldn’t lead to inflation.

Instead, the youth wing bureau said inflation occurs when a country fails to produce enough food or goods for money to be spent on.

They also said that according to MMT, the circulation of money into the market needs to be balanced with the output of goods to stabilise the market’s demand and supply.

An economist, when asked to review the Bersatu Youth post, said that while the MMT is compelling in facing a dire economy, it was also “a bit too extreme”.

“The MMT is a bit too extreme in the sense that the government can freely spend their money as they can always finance it through the issuance of fiat money (printing money).

“Basically, borrowing from its own currency. The problem with this theory is it doesn’t address the risks of moral hazards,” the economist said on condition of anonymity.

 

The economist explained that money is a medium of exchange which needs to be earned with effort.

In economic terms, this means the factors of production such as labour, capital, land and entrepreneurs need to be developed.

“If the moral hazard is not being addressed it will have an impact on productivity, and given that lower output will be produced, it could result in inflation.

“Moral hazard here refers to a reluctance to work harder and diligently because money becomes so easily available especially if the channel is done via cash transfer programmes and subsidies,” they said.

The economist added that ideally, the government needs to craft assistance that would alleviate the people’s financial troubles while also encouraging the people to uplift themselves in terms of value-adding activities.

Meanwhile, former deputy youth and sports minister Steven Sim urged Prime Minister Muhyiddin Yassin to reprimand Fayhsal and get him to withdraw his printing money proposal.

“Wan Ahmad Fayhsal’s suggestion to print money displayed his economic naivete.

“He ignores basic economics of the disastrous consequences of loss of confidence in the monetary system, hyperinflation and the ultimate collapse of the economy,” Sim said in a statement.

Umno Youth chief Asyraf Wajdi Dusuki said Fayhsal – his Bersatu counterpart – should focus on more realistic and practical suggestions.

This includes joining Umno in urging the government to extend the loan moratorium to all borrowers and allowing everyone to withdraw from their EPF Account 1 – MKINI

MALAY MAIL / MKINI

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