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As title of this video suggests, we are discussing this so-called Digital Handout, Digital Wallet utilizing the so-called CBDCs, what we have been talking about, I have been talking about on my personal channel too, so-called Central Bank Digital Currencies. This whole thing is well quite honestly rather Orwellian and in a bit of a departure from how we usually do things on this channel, for this piece, kind of an opinion piece here on my part, I am going to quote, cite more from the Bangkok Post, that is bangkokpost.com, the article is titled: Rich 'might not get B10,000 handout'. Well okay, the title alone is rather strange, the byline is: Deputy Finance Minister insists Digital Wallet scheme will go ahead despite growing criticism. Well then why even bring it up to us? Why even mention it? I'll get into that further.

Quoting directly: "The Government is considering revising its 10,000 baht Digital Wallet handout scheme by excluding wealthy people, Deputy Finance Minister Julapun Amornvivat said on Tuesday." So first off I want to say that that is their first thing is we are just going to, even though the nation is going into debt for this, we are going to exclude certain people even though the nation, it is national debt we are talking about that as we have discussed in other videos, the debt ceiling if you will here in Thailand was raised from 60% of GDP up to 70% of GDP. Now that happened sort of under “emergency conditions” going back, I think it has been about a year since that was proposed. There was a great deal of blowback to that politically; we talked about it at the time because people sort of said is it really a good idea for the nation to go in to further debt and believe me, Thailand is well aware of the pros and cons of debt, having gone through what they went through in the 90s going into the early 2000s. We all know what can happen when there is excessive debt for this country and look, I understand. Seemingly I am a little strange but I do have the fervour of the converted when it comes to Thailand. I have naturalized to Thai citizenship, I love this place and I don't really like these weird Western notions, because that is what this is. We are seeing this coming from the West, quite honestly. This notion of, oh we need digital tracking of all the transactions and all of this, not to get too hyperbolic but they say it themselves in some of these organizations 'you will own nothing and you will be happy' and all of this stuff. I don't think this is good for Thailand. Let me get into this further. Quoting further: "The proposal comes at a time when the Government of Prime Minister Srettha Thavisin has been defending the centerpiece of its economic revival policy against critics who say that its cost at 560 billion baht is too much, as well they say it is not clear how the program will be funded." Yeah well, as we discussed in other videos, it seems they are going to fund it out of putting the country into further debt and on top of that, I don't think it is quite accurate to say 560 billion Baht, they have been talking about that. That appears to be the cost of putting in this new “infrastructure for these digital wallets”. I did the numbers just off the top of my head. I went on Google; Thailand's population is 71.8 million people presently at least that is what Google said. 10,000 baht times that came out to something in the neighborhood of something like 718 billion Baht so where is that coming from? Oh wait, that is the other two thirds of the debt going from 60% of debt-to-GDP ratio, up to 70% of debt-to-GDP ratio. As we talked about in another video, that is about 1.5 trillion Baht and they are taking 560 billion of that to build this "infrastructure" that from the best of my knowledge at least anecdotally, I can't see anybody has been clamouring to get rid of cash and create this digital infrastructure for CBDCs. But okay, leaving that aside, there may be arguments pro and con in favour of upgrading Thailand's system. I don't see a lot of Pro, I see a lot of Con; I see a lot of new debt for something that I don't see the economy really needs. What the economy needs is the Government to get out of the way and let the economy be the economy after two and a half years of being shut down over let's say an exaggerated threat at best, especially two and a half years of economic shutdown and really hard shut down for tourism which makes up 20% of the overall GDP here. I mean that was what caused the economic problems, so the Government just sort of getting out of the way and letting us get on with it is probably the most optimal scenario moving forward. Okay but 560 billion, that is for the infrastructure. It looks to me like the other 718 billion or whatever it is going to come out to be, that makes up for the rest of that debt. So when they say, "it is still not clear how the program will be funded", well it looks pretty clear to me, they are going to fund it with debt and then that means more taxes, let me get into it. Quoting further: "The digital wallet steering committee will consider, (“consider”) revising the scheme when it meets on Wednesday, or on October 19, to exclude wealthy people, as some critics have suggested, Mr. Julapun said." Now first off, the only thing that they say they are going to consider revising is just cutting people out of the hand out side of it, not the going into debt part, not the creating this infrastructure that nobody is particularly looking for and an infrastructure which will be on the level of Orwellian levels of surveillance for our transactions just occurring in Thailand; look there are plenty of ways to track transactions. We see AMLO, the Anti Money Laundering Office, they do that all the time and yes, they have to do a little extra work but honestly, average people deserve a certain modicum of privacy in their personal economic transactions, so I am sorry, I just don’t buy the argument that the answer to this problem or to the problems of crime and things of that nature is to quite honestly to use a metaphor, “to use a mallet to swat a fly” in the form of just creating a total surveillance state when it comes to economic transactions.

Quoting further: “But he insisted the scheme is necessary to help kickstart the economy next year,” - again based on what? Why is it necessary? Is it necessary because we have had low tax revenues and the economy has been down the last 3 years? Well, the blame for that can largely be pointed at the response which resulted in the economy being shut down. That response was implemented by the Government – quoting further: adding “that the Government expects to see 5% economic growth if the programme performs as expected.” Let’s get into that in a minute because there the devi is in the details, as they say. Quoting further: “The country has long standing problems that have drastically affected people’s living conditions, while it has been collected fewer taxes, (I think they meant “it has collected fewer taxes”, Mr. Julapun noted.” 

Well first off, it has collected fewer taxes because you shut down the economy for two and a half years, that is why there is less revenue. And, by the way, when that shutdown occurred, and I was actually in the business of my wife’s, who was shut down by the district office, and when she asked, “well what are we supposed to do about our livelihood, and about our business, and the people we employ?” They just shrugged. It was basically, that is your problem. Now the government is sitting there saying, “well we don’t have any money!” It seems like the response from us who were put through not being able to make any money and they just shrugged their shoulders at us, it seems like the response is kind of, “well, it is going to be a bit of a hard time for you and then you will get through it, but there is a lag here. You shut us down for two and a half years. Tax revenues are low, we are back open again, you are probably not going to see substantially similar tax revenues for the next year or so because there is a lag, that is the way it works. Quoting further: “Household debt has also increased to nearly 90% of gross domestic product (GDP)” (I will get to that in a moment), while public debt has risen from 40% a decade ago to more than 60% of GDP. So let’s start with one thing. This 90%, they say “household debt”, notice that. Not housing” debt. I was reading other articles about this. Thailand primarily is not, the Thai people are not overly encumbered with mortgage debt which is a real problem in the West because a lot of folks are encumbered with mortgage debt and that means their debt impact their shelter, the place that they live. Thailand does not have those same problems and quite honestly, when the era of financialization really hit hard in the 90s and international banks came into Thailand and have since been here, they threw out cheap credit happily and then in the aftermath of the Great Financial Crisis, GFC, whatever you want to call it, 2006, 2007, 2008, what has been called the Lehman collapse, Great Financial Crisis, the great recession, whatever you want to call it in the West, again interest rates, especially in Western banking institutions went down even past zero in some instances. That had ramifications on Banking out here, credit became cheap, banks were lending at an enormous rate but here in Thailand, they weren’t securing most of that debt in the form of housing collateral. Well, that is kind of on the banks. If you chose to loan to unsecured creditors, well okay, but that is on you at the end of the day. Quoting again here: “While public debt has risen from 40% a decade ago to more than 60% of GDP. Okay, so we have gone from 40 to 60%. At the end of the day by the way, and the United States is learning this as is Europe, eventually the chickens come home to roost with national debt. Even though you say, “well it is not my personal debt”, well it results in things like inflation for one thing and that is a big one which is sort of indirect tax. It also can result in certain economic instability because the country or the nation is encumbered with that debt and therefore they have to pay to service that debt and they can’t use that capital for otherwise productive purposes. Quoting further: “The Pheu Party proposed the handout of 10,000 baht to all adult Thais, over age 16 as a way to get money circulating in the economy, creating a multiplier effect that in turn would lead to increased tax collection. It is expected to start in February.” I am going to read this again because I want people to hear this and then I am going to break it out because there is economic quite honestly, buzzwords in this or buzz phrases and it needs to be parsed out. Let me quote it again: "The Pheu Thai Party proposed the handout of 10,000 baht to all adult Thais over age 16 as a way to get money circulating in the economy creating a multiplier effect." Well first off, multiplier effect, they are just talking about the velocity of money. People get it in their hands and then they go out and use it but they haven't created concomitant goods and services in the economy to justify that creation of new currency. So, for one thing, you are going to get inflation; it is just baked in. The other thing is this notion of a multiplier effect. Now that to my mind is some economic gibberish. In lawyers' speak sometimes they accuse lawyers of using 'legalese' if you will. Well, this is the equivalent of that in an economist kind of jargon, posture if you will, this notion of a multiplier effect. That just simply means the money moves around, that is what that means. But what is the multiplier effect to the actual economy, if no concomitant goods and services have been created? What multiplier has occurred in terms of value? I would posit, NONE. It is just moving ones and zeros around on a ledger because that is effectively what you are doing because this whole thing is digital anyway.

Then they get to the key part here. "That in turn would lead to increased tax collection." So let's break it out. What is happening. Debt is being created; it is being foisted if you will or it is the burden of which is on the country who really as a people nothing has fundamentally changed. We are all still struggling to get further past the shutdown we have all had to deal with so you know nobody really has this money. So, they are creating it out of thin air and then they are pushing it into the economy, the result of which is just moves around and that creates what we call in tax land for lawyers, “taxable events.” It goes to one person; they then go buy milk with it or some sort of food. They go to seven and they pick up some groceries, or they are paying VAT on that or they may use it to go pay their rent or they may use it to go pay a utility bill or something, whatever they may go pay a friend who fixed their car or maybe not a friend; somebody who fixed their car whatever. First off, this multiplier effect is totally tracked, complete surveillance of all of these transactions and it's based on debt with no concomitant value created to the system so what is resulting in is the nation being loaded with new debt but the benefit of that debt is simply taxation. That is really at the end of the day all it is; they just print money, move it around and then tax the movement. That is essentially what is going on here okay and again without creating any new value within the system which will result in inflation down the road because more of these digital tokens or whatever are chasing fewer goods and services so what's the result of that? Inflation. It would have to be unless they just destroy the tokens after they are done using them which then that at the end of the day; again this smacks a lot of the system under the Soviet Union or Communism where again money is not a reflection of even supposed value within the economy, it's just markers or ledgers on paper that the government just creates willy-nilly when they feel like it. Quoting further: “The scheme will go ahead despite opposition from more than 120 scholars, researchers, economic experts and even two former Bank of Thailand governors, Mr. Julapun said.” So, it is just going ahead, so why even bring it up to us? That is the thing to me is are you trying to do that to create a kind of implied notion that everybody was just on board with this? Quoting further: “He insisted that the Government has been listening to the concerns expressed but many people have been waiting for the project to begin so the government will not back off. ”Well fair enough, I do understand. There is a certain momentum that gets behind these projects but simply listening might not be enough. This could be detrimental to the economy and I think maybe listening a little harder or for a little longer might not be a terrible idea. “The project will still target vulnerable groups and low income people, he said, even if people who are better off were excluded.”

Well again the whole country is going in debt to create this so at least give it to everybody. I mean that's kind of the way I look at it, it's only fair. Everybody is going on the hook for it so everybody should get a benefit out of it. Quoting further: “The government expects people to begin registering for the scheme next month, Mr. Julapun said, adding that if they do not do so, it means they will not want to join the scheme.” I don’t even know what that means exactly. Quoting further: “The committee will also consider,”( this is where the Orwellian stuff, really my antenna just are going off), “The committee will also consider expanding the scope of the use of the digital currency, digital money, excuse me. It may widen the four kilometer radius from a person's home to within the tampon, district or even province where their official house registration is located.” I read this again. “The committee will also consider expanding the scope of the use of the digital money. It may widen the 4km radius from a person's home to within the tampon, district or even province where their official house registration is located.” Turn this on its head and think about it, think it through. Now they are saying okay we can wind it out to even the provincial level.”Think about it in reverse. If this goes online, they say “oh, you can use it anywhere”, but they can always take it back down to within a radius around your house. If that is not concerning to people I don't know what is; I don't know what is. Quoting further: “Mr Julapun reiterated the government's contention that there will be sufficient Financial sources to fund the project.” Well financial sources, of course yes financial sources are debt. It is debt. The country is going into debt to create a system I don't see a lot of people overly clamouring for, to do what exactly? And where is the direct economic benefit too also? I don't quite see that. For example, when taxes are used to build a highway or a high-speed rail system or a light rail system in a city, you pay the taxes, you put up the new infrastructure and then there is benefits to everyone, you can see the benefit. There's tangible benefits to the overall economy, to individuals generally, there's benefits to that. Where exactly is the benefit to this? The only thing I have seen that has been a benefit throughout this whole article is the notion that this money is going to move around, create a multiplier effect, i.e. create a bunch of taxable events that the government can then take the money back but then in the long term, because we have created no new value to sort of parallel this new currency, presumably we get inflation. Quoting further: “He declined to give more details saying only that the Budget Bureau is considering reducing the budgets of some other government projects for the next fiscal year to help fund it.” Considering! Considering!

Again, look I don't regularly go through an entire Bangkok Post article. This is one of those instances, but yet again on local politics especially, Bangkok Post is a great source of information; can't tip my hat enough to those folks over there. I urge those who are watching this video, go read that article for yourself in its entirety again. There's a ton of information in there I felt it was all pertinent to this video. This video is going to be a little longer than what we usually do but honestly is it really in Thailand’s best interest, at this point in time, maybe down the road you can make different arguments and maybe if we could see a little bit different ways in which this would be rolled out from a practical standpoint to say the least, I mean honestly I find it very scary the notion that “oh now it's digital money and we can designate the places where it is spent.” I would argue that is not money in the traditional sense of the word, at least in the western paradigm going all the way back to Diocletian and before and the Pandects ofJustinian and all these other sources of law in the Western context which do have reverberations out here in Thailand especially as it utilized the Civil Law system but again when looking at a cost benefit analysis, I am seeing a lot of cost and I am always happy to stand corrected if folks want to tell me in the comments what the benefits of this would be, I am happy to listen, I am happy to make another video but I am failing fully to see where the benefits are coming from.