Won Hee-ryong: "Lee Jae-myung, 'National Debt Has Plenty of Room'?... Nonsense Based on Ignorance"

"Smart Fiscal Policy Needed, Not Populism"

[Image source=Yonhap News]

[Asia Economy Reporter Lim Chun-han] Jeju Governor Won Hee-ryong criticized Gyeonggi Governor Lee Jae-myung on the 29th, saying, "Lee's recent claims have many problems. The core argument is that our country's national debt ratio is lower than the OECD average, so there is ample room for national debt, but this is close to nonsense based on ignorance."

On the same day, Governor Won said on Facebook, "The economic crisis caused by the novel coronavirus infection (COVID-19) is severe. In times of crisis, bold and swift support is necessary, and there is no disagreement with the argument to expand fiscal spending for this purpose," but added, "What is needed is not populist fiscal policy but smart fiscal policy."

Governor Won pointed out, "Our current national debt ratio (44%) excludes pension liabilities, but if these are included, it rises to 93%, exceeding the OECD average. This is by no means a situation where there is room for national debt." He continued, "Many OECD countries are reserve currency countries and can issue bonds more easily, but we cannot. Given that Korea is entering an aging society at the fastest rate in the world, a sharp increase in welfare spending is already expected in the coming years, and Korea has more public debt not included in national debt compared to OECD countries."

Governor Won stated, "To expand necessary support when needed, national finances should have been well managed during normal times, but due to the Moon Jae-in administration's populist policies of excessive spending over the past three years, the national finances are already showing red flags. This is why we must be cautious even at a time when active fiscal spending expansion is necessary."

Governor Won said, "It is essential to establish proper 'fiscal rules' this time, including a fiscal management roadmap and fiscal balance mechanisms. The dormant fiscal rules bill in the National Assembly must be taken out and prepared as soon as possible. Politics of compromise and integration are more necessary than ever for this."

This content was produced with the assistance of AI translation services.