[EDITORIALS] Skyrocketing National Debt
The rise in Korea's national debt has become a serious issue. According to the Ministry of Finance and Economy on Tuesday, the amount owed by Korea's central and regional governments jumped 11.93 trillion won ($9.14 billion), or 11 percent, during the past year to reach 119.7 trillion won in December. It is terrible to think that each Korean is born with the burden of debts worth 2.55 million won.
The national debt has doubled in only three years, since marking 65.6 trillion won at the end of 1997. It is absurd, even conceding that the government had to spend a great deal of money last year in enhancing the welfare of low income citizens and managing the national economy, which was battered by the 1997-98 foreign exchange crisis. It is also ridiculous that the national debt would have been larger had last year's tax receipts not been unusually large.
If debt guarantees by the government, which are excluded from national debt calculation, and other potential debts, such as losses in state-run pension funds and uncollected bailout funds, are taken into consideration, it is hard to imagine what amount the national debt would reach.
In this situation, the government is comforting itself with the thought that the national debt, some 23 percent of gross domestic product, is not large enough to affect the nation's financial soundness. What on earth were government officials thinking when they recently proposed tax cuts in such a situation, where the state should do its best to reduce its debts even by a won? They should recognize that national finances in the red will be a major obstacle to the government's smooth operations and will be a heavy burden on our posterity. The government should hurry to design strong measures against a rise in the national debt.
Taxes cannot be raised without limit, so the government should focus first on reducing waste, while developing new sources of taxation and designing measures to collect more from high-income tax dodgers. Civic groups should actively campaign against tax evasion. The government should also reduce support to debt-ridden companies, which will only increase the national debt, and speed corporate reform.