Yoo Seung-min: "Household debt due to Yeongkkeul and Debt Investment... Lee Jae-myung, Talking Nonsense"

Former People Power Party lawmaker Yoo Seung-min [Image source=Yonhap News]

[Asia Economy Intern Reporter Kim Choyoung] Former People Power Party lawmaker Yoo Seung-min criticized Gyeonggi Province Governor Lee Jae-myung, who pointed to low national debt ratio and welfare spending as causes of household debt surpassing 1,700 trillion won for the first time last year, blaming the failure of real estate policies as the root cause.

In a post on his Facebook on the same day, former lawmaker Yoo stated that the cause of the increase in household debt is "so-called 'Yeongkkeul (pulling together all one's soul) and Debt Investment (debt-financed investment)'," adding, "Because of crazy housing prices and paying monthly rent, people have to take out loans, and they even borrow to invest in stocks."

He continued, "Among household debt, mortgage loans account for 911 trillion won, making up 56%, and there are housing-related loans even among unsecured loans. This shows that housing-related loans make up a large portion of household debt," and pointed out, "Even with strengthened regulations like DTI (Debt-to-Income ratio) and LTV (Loan-to-Value ratio), the rapid increase in housing-related loans indicates the difficulty in curbing loan demand as long as housing prices and monthly rents rise."

Furthermore, he argued, "The solution to guiding a soft landing of household debt is ultimately to prevent the surge in housing prices and monthly rents and stabilize the housing market," adding, "If housing prices suddenly crash, the deterioration of household debt and financial instability could become problematic. Therefore, gradually stabilizing the housing market is the best approach."

Former lawmaker Yoo criticized Governor Lee, saying, "Lee Jae-myung claims that the high level of household debt in our country is due to the low national debt ratio and low welfare spending," and added, "Household debt surged as a result of Yeongkkeul and Debt Investment caused by the failure of real estate policies, but instead of addressing the real estate problem, he is talking nonsense."

Earlier, on the 12th, Governor Lee posted on his Facebook titled 'We Must Not Ignore the People's Hardships,' stating, "Expansionary fiscal policy is inevitable," and "It is a matter of choice whether a country with capacity will borrow to reduce household burdens or ignore household pain and stand idly by."

Governor Lee cited statistics from the International Institute of Finance (IIF), saying, "Our country's national debt is 45.9% of GDP, only about one-third of the advanced countries' average of 131.4%," and criticized, "Opponents of expansionary fiscal policy, including the opposition party, keep repeating that increasing national debt is absolutely unacceptable."

Meanwhile, former lawmaker Yoo emphasized, "If wrong diagnoses lead to inappropriate prescriptions, who will bear the consequences?" and stressed, "We must acknowledge that the failure of real estate policies caused not only housing prices and monthly rents to rise but also the surge in household debt, and provide accurate solutions."

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