[EDITORIALS]The debt needs attention nowThe national debt is growing at an alarming rate. Last year alone, according to the International Monetary Fund standard, it increased by 32 trillion won ($26.6 billion), to a total of 165 trillion won. The increase was largely due to uncollectible public funds turning into debt, and considerable spending to defend the exchange rate.
The government claims our ratio of national debt to gross domestic product is much lower than that of other advanced countries, and that therefore the debt is nothing to worry about. But the situation is not so simple. Above all, the debt is rising too quickly. It stood at 65 trillion won at the end of 1997, passed 100 trillion won in 2000 and jumped to 165 trillion won last year.
This is a serious problem, because it will rise even more under current circumstances. Twelve trillion won in uncollectible public funds will turn into national debt each of the next three years. That’s not all. Our fast-aging society, and the expansion of public welfare, will mean more public spending, and we cannot count on increased revenue from rapid economic growth as in the past. Two more burdens are North Korea and the construction of the new capital. Put simply, money isn’t coming in, we have a big family to feed and we’ve incurred a whole lot of debt. By 2006, the national debt is expected to surpass 200 trillion won.
The current debt amounts to 3.45 million won per Korean. Adding the average personal debt of 10 million won, it becomes clear that the country and everyone in it is laden with debt. Factoring in the annual pension deficit and the debt redemption guarantee, the situation becomes even more serious. The national debt makes state affairs difficult to manage and impairs the country’s economic growth potential. One reason we overcame the 1997 financial crisis was that our finances were in good shape. Now they are a burden.
Yet the government assures us everything is fine, comparing us to other countries in simplistic terms. The administration and the ruling party should work on the debt before things get worse. Cut down on decorative projects and pork-barrel spending on welfare, and make our finances more sound. An individual becomes a credit delinquent if he or she spends beyond his or her capability. The same goes for countries.