Thread by @Abhishe27960014

"Navigating the Economy of Freebies: Benefits and Risks"🧭💰

People have been arguing about whether or not free things from the government are good for a long time.🗣️💬

Let's understand both sides of the coin in this 🧵from an economic point of view.👇

#Freebie #FreebieAlert

1) Let's start with an important point:

It's crucial to distinguish between freebies and welfare programs.

In my view, a welfare program is something that can benefit a country in the long run, both economically and by improving the lives of its citizens.

Hence, in the long run, states should invest resources & allocate capital to sectors such as:

✅Education
✅Health
✅Agriculture
✅R&D
✅Infrastructure

This will aid in the creation of additional employment opportunities and the sustainable, long-term reduction of poverty.

2) It's a matter of debate to determine which freebie is provided to achieve short-term benefits and which one is aimed at fulfilling long-term objectives.⚔️

Therefore, I will avoid discussing which political party did what, and whether their actions were right or wrong.

3) However, it's crucial to comprehend the ways in which freebies aid both people and the economy. Please see below.👇

🔶Access to Basic Needs

Freebies such as

👉Food
👉Water
👉Healthcare
👉Education

can help ensure that everyone has access to basic necessities.

When a government ensures that all of its citizens have access to basic needs such as food, water, shelter, and healthcare, it is setting them up for success in the future.

How?👇

This is because people who have their basic needs met are better able to focus on education, employment, and other activities that contribute to economic growth.

A country's GDP and other economic indicators are ultimately driven by the well-being of its citizens.

🔶Boost in economic growth🚀

By providing freebies, the government can increase the purchasing power of people, leading to an increase in demand for goods and services. 📈

This can create more job opportunities, increase production, and stimulate economic growth.

4) But, what are the potential risks that we should be aware of when providing freebies?🤔

🔶Government Debt

Providing freebies can be expensive, and governments may fund these programs by taking higher debt,

This can have negative economic consequences.

🔶Creating Dependency

Freebies can also create a dependency on government assistance, which can be difficult to break and may lead to a sense of entitlement.

Below is an instance of individuals becoming overly reliant on the government and losing motivation. 👇

It occurred in the US during the COVID-19 pandemic.

There were several instances where individuals were hesitant to return to work due to the unemployment benefits they received from the government.

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