Hee-Wan Han of South Korea, right, is doused with champagne by compatriot Soo-Yun Kang as Han's caddie, Shaun Clews, background, looks on after Han won the LPGA Office Depot Championship at Trump National Golf Club in Rancho Palos Verdes, Calif. on Monday, Oct. 3, 2005. Han scored twelve under par, 201 for the 54-hole tournament, while Kang was second, two strokes back. (AP Photo/Francis Specker)



South Korea's debt increase is too steep.

Snowballing debt of South Korea is suspected. according to data from the parliamentary inspection of government offices by the Ministry of Finance and Economy. Since the beginning of the participatory government South Korea's debt has increased rapidly. In the last two years, the debt has increased by 33.8%. It is expected that the debt against GDP will have increased up to 30.4%, 248 trillion won, by the end of this year. At the end of 2002, it was 133 trillion won. It has doubled. In fact, the deficit to be covered by taxes has been over 100 trillion won, which is over 40% of the total debt of South Korea. Next year, because of a lack of tax income, they cannot balance the budget. This renders South Korea in the red for 9 years.
Despite the debt, the government remains calm, saying, "Don't worry". This is not an easy-going situation, but an emergency. The problem is that debt is increasing too rapidly. National debt and the rate of the burden on the people are the highest among OECD countries. The government, however, says that South Korea's debt is still lower than that of other countries.
The snowballing debt has resulted from increased national expenditures, such as the issue of national bonds and public works, and insufficient tax revenues. In the near future, there will be more expenditures in South Korea; compounding the problem of increasing national debt. What is worse, the government still takes an optimistic view and concentrates on projects rather than being more concerned with expenditures.
It is expected that the structure of expenditures will widen, but South Korea's ability to take on the burden of the debt will get weaker in the future due to expansion of the social security safety net and an aging society. In addition, if deficit tax revenues depend on the issue of national bonds, the next generation will have to shoulder the burden. A debt of over 100 trillion won will break the back of the people.
It is time that the government should actively lead and manage the national debt. Primarily, ways to reduce the national debt are to stimulate private consumption, activate corporate investment, and then to revive the economy in South Korea.
/ 입력시간: 2005. 10.04. 09:32