The U.S. should follow Hong Kong's lead and give a cash handout to its citizens amid the coronavirus pandemic, a strategist told CNBC Friday.
While Freris praised Hong Kong for its cash handout initiative, some strategists claimed it would do little to encourage consumer spending amid the coronavirus crisis.
Speaking to CNBC's "Capital Connection" following Hong Kong's budget announcement, David Webb, editor of webb-site.com, noted that the amount the government had budgeted for its cash handout initiative had some implications for how effective it might be. "They're budgeting 71 billion, that implies 7.1 million people over the age of 18, but in fact there's only about 5.5 Hong Kong permanent residents in Hong Kong," he said. "So that indicates there's about 1.6 million overseas. Once you are born in Hong Kong to Hong Kong Chinese parent, you have permanent residency for life basically and you can be living in Birmingham or Vancouver and still claim your 10,000 dollars.
Meanwhile, Alicia Garcia-Herrero, chief economist for Asia at Natixis, told CNBC's "Street Signs Europe" earlier this month that she was skeptical the "helicopter money" would have the desired result. "Frankly speaking, I don't think this is the way to make people go to the store, let alone buy online," she said. "If people don't want to spend, they won't spend. If you're lucky they will keep the money in their account, which won't help the economy. If you're unlucky, you'll see there is an outflow which would obviously put pressure on the Hong Kong dollar. So I think this helicopter money is not necessarily very effective.
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