We must reflect on past follies first

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We must reflect on past follies first


The political wrangling over who’s to blame for the pitiful state of the free school meal and day care programs is becoming tiresome. In the public eye, the presidential office and the ruling and opposition parties are to blame.

The Blue House and the Saenuri Party claim that free day care is the only legitimate service worthy of central government support, while the opposition party demands heavier taxes on the rich to raise the funds to save both programs. But what the president, political parties, local governments and district education offices must do first is admit to their nearsightedness and ask for understanding.

It doesn’t take an economist to see that a free-for-all welfare policy will have a catastrophic end. Korea’s free school lunch service, its day care program, and basic allowances for low-income senior citizens - the three newest policies - cost 21 trillion won ($19.1 billion) this year, and that amount is expected to reach 30 trillion won in 2017. The central and local governments somehow sustained the programs last year by moving around expenditures, but that can’t last. It’s clear that the initial plan to finance those programs through digging up unregistered taxes and reducing tax exemptions and deduction cases was wishful thinking. Better welfare without a tax hike is clearly vain political rhetoric.

But the opposition shares the blame because it started this welfare contest in 2010. During the last presidential election, main opposition candidate Moon Jae-in promised welfare policies worth 192 trillion won - double Park Geun-hye’s promise of programs worth 97 trillion won. We must calmly reflect on the consequences of populist promises concerning welfare. The government and society must figure out how to come up with lasting funds for a sustainable welfare system.

The central and local governments still squander too much tax money on unnecessary affairs - those must all be eradicated before anyone declares that looking after a child cannot be done for free. Some analysts habitually point to Northern European countries for welfare models and cite average welfare spending within the Organization for Economic Cooperation and Development (OECD) to demand more investment. But at the same time, Korea shows the fastest growth among OECD members in welfare spending. The tax burden in Northern Europe is over 50 percent. Ours is 19 percent. We should look to the United States and Japan, instead, for a benchmark. They boast relatively strong social security with a 20 percent tax burden.

There is no such thing as a free lunch. The bill always arrives and the political sphere always looks the other way. Turning away from responsibility doesn’t change the situation. We must reflect on past follies and find reasonable solutions.

JoongAng Ilbo, Nov. 12, Page 30

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