National Debt Irreversible in 14 yearsThere was disturbing news from the Korea Institute of Public Finance. They warned that the national budget may be in an irreversible state in 14 years.
However, the government insists that tax payments have been successful, and also plans to pay back the national debt on schedule. On an optimistic note, the government also expects revenues and expenditures to be balanced by 2002, two years earlier than the original plan.
The national debt has risen sharply since the reformation of most public and financial sectors during the recent foreign exchange crisis. The national debt reached $97.22 billion, 23 percent of the Gross Domestic Product.
Debt is expected to reach $113.04 billion by the end of the year, and this imbalance will surely continue for several years.
At the moment, the government and the ruling party do not fully recognize the seriousness of the problem. They repeatedly shout, "No problem," when in fact, they should be in a hurry to resolve the national debt.
Additionally, the government is promising to do more for the people, prepared to further burden an already strained budget. A reduction in taxes would be impossible, considering the finances needed to restructure an ailing financial sector.
Both ruling and opposition parties are competing to reduce the debt for farmers and fishermen.
Excessive borrowing now is a burden for future generations. It is surely a barrier for real economic activity.
According to the Korea Institute of Public Finance, the current debt will reduce the economic growth rate by 5.7 percent. It's time to correct the troubled national finances and balance the national debt.
There shouldn't be a division between the ruling and opposition parties in solving this problem. Before facing an irreversible financial condition, the priority must be to pay back the national debt.
by Ro Jae-hyun