The use of fiscal policy to reduce economic and social inequality: Reflections after the Tom Yum Kung crisis and COVID-19

Abstract

This article aims to explain the Tom Yum Kung crisis and COVID-19 and analyze the effects of fiscal policy to reduce economic and social inequality by studying documents and academic works and conducting content analysis. The analysis results show that the Tom Yum Kung crisis occurred in 1997 during the government of General Chavalit Yongchaiyudh. By announcing the floating of the baht, the baht immediately depreciated, affecting financial institutions and causing an increase in public debt. In late 2019, the outbreak of the coronavirus 2019 (COVID-19) became a Public Health Emergency of International Concern and a global pandemic, resulting in an increase in government spending, especially the public health emergency budget. The Thai government had to allocate a large budget to support the public health system. The fiscal policy used increased public debt, which the government should have fiscal discipline in controlling budget operations or budget spending by maintaining a balance between income and expenditure and incurring public debt only as necessary and according to the ability to pay debts.