Freebies vs welfare debate and the much-ignored advice of Lee Kuan Yew

The issue is not the freebies, but the constraint of limited means. If a government has the money, it can dish out whatever freebies it likes, but not if it is highly indebted, writes T N Ninan

The debate over “freebies vs development expenditure” reflects a primary problem that economics is supposed to tackle: The relationship between unlimited wants and limited means that have alternative uses. So would you sacrifice an electricity subsidy to invest in better schools? Or, should you prefer building more highways to expanding the health budget? This is the issue that the Prime Minister posed when he said freebies were coming in the way of development.

There are freebies and freebies. Education, welfare payments, and highways all have what economists call positive externalities; i.e. they have a public utility that goes beyond benefit