Seoul Mayor Oh Se-hoon Slams Cash Handouts: 'Worst Policy Among Bad Policies'

Seoul Mayor's Sharp Criticism of National Cash Distribution Policy

On July 16, 2025, Seoul Mayor Oh Se-hoon delivered a scathing critique of President Lee Jae-myung's consumption coupon policy during his third-anniversary press conference. The mayor didn't mince words, calling the cash distribution program "the worst policy among bad policies" and describing it as a temporary money-dispersing measure that fundamentally lacks long-term economic vision. This confrontation highlights the growing tension between local government leaders and the central administration over fiscal policy approaches.

Oh Se-hoon's criticism comes at a particularly sensitive time as South Korea grapples with economic challenges and the Lee Jae-myung administration seeks to stimulate domestic consumption through direct cash payments. The mayor's position represents a significant departure from typical cooperative rhetoric between different levels of government, signaling deeper concerns about the sustainability and effectiveness of the current economic stimulus approach.

Understanding the Consumption Coupon Policy: A Nationwide Cash Distribution

The consumption coupon policy, officially known as the "People's Livelihood Recovery Consumption Coupon," represents one of the most ambitious cash distribution programs in South Korea's recent history. Under this initiative, every South Korean citizen receives a minimum of 150,000 won, with amounts varying up to 550,000 won based on income levels and regional factors. The program is part of a massive 31.8 trillion won supplementary budget approved by the National Assembly.

President Lee Jae-myung has positioned this policy as a crucial tool for economic recovery, emphasizing its role in supporting small businesses and vulnerable populations. The distribution began in July 2025, with payments made through credit cards, prepaid cards, and local gift certificates. For international observers, this represents a significant shift toward direct government intervention in consumer spending, reflecting the administration's belief that immediate cash injection can stimulate economic activity more effectively than traditional monetary policy tools.

Financial Burden Shifted to Local Governments: Seoul's Fiscal Dilemma

One of Oh Se-hoon's most pointed criticisms centers on the financial burden transfer from central to local governments. Initially, the central government promised to fully fund the consumption coupon program, but local governments now find themselves shouldering significant portions of the cost. This shift has forced Seoul to consider issuing municipal bonds, a move that Oh Se-hoon describes as difficult to justify to taxpayers.

The mayor's frustration reflects a broader challenge facing South Korean local governments, which must balance central government directives with local fiscal responsibility. Seoul's consideration of bond issuance specifically for consumption coupons highlights the awkward position local administrators face when supporting policies they fundamentally oppose. Oh Se-hoon emphasized that while Seoul might "tighten its belt" and issue debt once to cooperate, such approaches cannot become routine practice.

Economic Concerns: Inflation and Real Estate Market Impact

Oh Se-hoon's criticism extends beyond fiscal concerns to fundamental economic theory, particularly regarding inflation and asset price inflation. The mayor warned that injecting cash into the economy would inevitably lead to real estate price increases, stating that "when money is released into the market, real estate prices will rise". This concern reflects broader debates about the relationship between monetary expansion and asset bubbles that have plagued economies worldwide.

The mayor's position aligns with conservative economic thinking that views direct cash distributions as potentially counterproductive. He argued that while cash injection might temporarily boost consumption during economic downturns, the resulting increase in money supply creates negative side effects that ultimately harm economic stability. This perspective contrasts sharply with the Lee Jae-myung administration's belief that immediate consumer support outweighs potential inflationary risks.

Political Implications: Conservative Opposition to Progressive Economic Policy

The confrontation between Oh Se-hoon and the Lee Jae-myung administration represents a broader ideological divide in South Korean politics. As a prominent member of the conservative People Power Party, Oh Se-hoon's criticism reflects his party's skeptical stance toward expansive government spending programs. His characterization of the policy as unavoidable due to the "early stage of the administration" suggests tactical political maneuvering rather than principled support.

This political dimension becomes particularly significant given Oh Se-hoon's previous consideration of presidential ambitions, though he declined to run in the recent election. His vocal opposition to the consumption coupon policy positions him as a leading conservative voice on economic matters, potentially enhancing his political profile for future opportunities. The mayor's willingness to publicly criticize central government policy demonstrates the increasing polarization of South Korean political discourse around economic intervention.

Public and Community Response: Mixed Reactions to Cash Distribution

The consumption coupon policy has generated diverse reactions across South Korean society, with communities split between appreciation for immediate financial relief and concerns about long-term economic consequences. Supporters argue that the policy provides crucial support for struggling families and small businesses during challenging economic times. The program's universal nature, providing benefits regardless of income level in the first phase, has been particularly popular among middle-class families.

However, critics echo Oh Se-hoon's concerns about fiscal sustainability and economic distortions. Online communities have debated whether temporary cash distributions can meaningfully address structural economic challenges or merely postpone necessary adjustments. Some economic analysts have supported the mayor's position, arguing that the policy represents short-term political convenience rather than sound economic management. The debate reflects broader questions about the role of government in economic management and the effectiveness of direct cash transfers as policy tools.

International Context: Cash Distribution Policies in Global Perspective

South Korea's consumption coupon policy exists within a broader international context of cash distribution programs implemented during various economic crises. Similar policies have been adopted by governments worldwide, from pandemic-era stimulus payments to regular universal basic income experiments. Oh Se-hoon's criticism reflects concerns that have emerged in other countries about the long-term sustainability and effectiveness of such programs.

For international observers, the South Korean debate offers insights into the challenges of implementing large-scale cash distribution programs in developed economies. The tension between immediate economic relief and long-term fiscal responsibility represents a fundamental policy dilemma that many governments face. Oh Se-hoon's position that such policies cannot be "repeatedly used" aligns with international experience suggesting that cash distributions are most effective as temporary crisis responses rather than permanent policy tools.

Future Implications: Sustainable Economic Policy Debate

The confrontation between Oh Se-hoon and the Lee Jae-myung administration signals broader debates about South Korea's economic future. The mayor's insistence that regional governments cannot repeatedly shoulder the burden of cash distribution programs highlights fundamental questions about fiscal federalism and the appropriate division of financial responsibilities between central and local governments. This issue will likely continue to influence South Korean politics as the country navigates economic challenges.

Oh Se-hoon's critique also raises important questions about the effectiveness of demand-side economic policies versus supply-side interventions. His preference for structural economic reforms over temporary cash distributions reflects a philosophical divide about the government's role in economic management. As South Korea continues to face demographic challenges, technological disruption, and global economic uncertainty, the debate between immediate relief and long-term sustainability will remain central to policy discussions. The mayor's position that one-time cash support cannot serve as a solution for economic recovery represents a significant challenge to the current administration's approach and will likely influence future policy debates.