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The South Korean National Debt Problem Viewed from a Future Perspective

Updated on November 2, 2019
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1. Progress of Korean National Debt

In the 1970s, the concept of fiscal management was weak, and the majority of the deficit was occurring mainly from grain funds ruthlessly issued by grain securities. This was extensive in policy financing, and the operation of deficits through some funds was inevitable.(Hwang Seong-hyun, 2011) The finances that had been in good operation until the 1980s collapsed in 1997 when they were rescued from the financial system. Hwang Sung-hyun looked at the following reasons for receiving the financial bailout in 1997. First, in the early 1980s and mid-1980s, price stability was the top priority, and austerity measures were implemented to do so, in which the fiscal balance improved considerably. Second, the principle of in-tax spending was maintained even if the fiscal stance was expanded due to the previous austerity measures for falling prices. Third, the government controlled interest rates until the 1990s, so the burden on government bonds was less. Fourth, before the financial rescue, the Korean economy maintained a high growth rate, thus keeping interest rates and the national debt ratio low. However, the nation's debt ratio rose because its fiscal health deteriorated considerably in the process of falling into financial crisis and recovering again, and it was converted into a majority of government bonds in the red. In the 2000s, in the process of squeezing the public funds and deficits from the financial crisis, the uncollected ones were converted into most government bonds. Professor Lee Myung-bak administration's financial failure to manage is for the increased number of causes of the national debt ratio hwangseonghyeon in. The public funds injected at the time in 2008 were larger than the 1997 economic crisis. Also, given the real fiscal deficit, the money injected during the 2008 economic crisis was larger. Participatory government deficit ratio was 0.4 percent, while at the time of the Lee Myung-bak's administration is 1.5 per cent. For the fiscal deficit ratio gdp to the average of the participatory government, the government of the people in participatory government, Lee Myung-bak government 2.3 percent, 0.4 percent, 2.1 percent, in order to Lee Myung-bak, around the turn of the Government.The highest ratio of 1.9 percent, and three government records. Policy factors have also contributed. Debt increased as the government excessively stuck to its over-promoted tax cuts and 747 commitments. As a result, the economy has worsened further amid unfavorable conditions such as the global economic crisis and the eurozone fiscal crisis, and the subsequent economy has become difficult to grow due to the aftereffects. Jhoon Goo Rhee, a professor Lee Myung-bak administration's economic policies is nominal, and virtually only a failed policy criticized Roh's remarks (Jhoon Goo Rhee, 2013). He criticized the 747 pledge as a policy that ignored South Korea's potential growth and pushed it unilaterally. 7 % growth rate is 747 pledges, $ 40,000 per capita income, Lee Myung-bak said he would create the world's seventh-largest economy one of the policy criticized for the government's pledge. He criticized the 747 pledge for causing major aftereffects to the Korean economy, causing many to suffer.

2. Positive Status of Korean National Debt

The current problem of Korean debt is not a serious one right now. Currently, the national debt is relatively sound compared to other countries. The index for the soundness of the national debt, which came from the gap between the economic adjustment's basic fiscal balance, net debt and growth rate and interest rates, was high. The ranking in the three sections is obtained by summing up to ensure the soundness of the national debt. First, the basic financial balance of the adjustment is obtained. This is a fiscal balance that excludes part of economic factors and net interest expenditure arising from financial assets and liabilities from the actual fiscal balance to ensure more accurate sovereign debt health. The worse the index gets, the worse the index gets. The second is to get net debts. The more the total debt minus the financial assets owned by the government, the worse the indicator is. The last is the gap between growth and interest rates. It is measured by subtracting the interest rate level from the economic growth rate. If this result is low, the index will deteriorate. However, when the basic fiscal balance is in the black, the national debt health does not deteriorate significantly.

Korea's total financial debt stood at 36.2 percent of GDP as of 2010, the third-lowest figure among OECD countries (111.3 percent of debt to the OECD). As of 2010, the country's debt stood at 420.5 trillion won. It is currently on the superior side of Korea's national debt. And as the economy has improved recently, tax revenues have shifted to the black, resulting in the early repayment of 4 trillion won in debt. Also, problems are not seen right now, such as the issuance of state bonds by reducing the amount of government bonds (decreased from 700.5 trillion won to 682.7 trillion won), and the national debt ratio (decreased from 38.6 percent to 37.7 percent). The IMF also praised the nation's fiscal health and fiscal capacity as the world's second-highest in May, and its credit rating has continued to improve, which it said was a good fiscal capability. Hankyoreh, OECD "Best of Korea's Fiscal Health"...2015.118, a distorted report card made by "CSI Gang-bak."

Even in the past, debt was lower than this. In the 1970s, it recorded 11% of GDP, and recorded the lowest national debt ratio from 94 to 1996. Looking at the amount, the national debt did not exceed 100 trillion won until 70 to 95 years ago, a rare occasion for Korea to start growing. The nation's fiscal balance existed in the 1970s, when the ratio of fiscal deficit to GDP was only 3 to 5 percent by the 1970s.

3. Problems of Korean National Debt national debt

the problem of the rapid pace of growth of Korean debt.

Currently, South Korea's national debt has not caused any major problems right now, he said in 2-1. However, the growth of the national debt is rising very quickly. As you can see in the picture below, the amount of total debt has been increasing lately. have more than doubled to While the total amount of national debt stood at 359.6 trillion won in 2009, growth is building up at 741 trillion won in 2019, the ninth fastest in the OECD world in a decade. To analyze the graph, the growth rate of general government debt rose 9.3 percent to 717.5 trillion won in 2016 from 459.2 trillion won in 2011. This is the seventh-highest rate of increase among the 29 OECD countries. Debts to GDP also grow very fast. Between 2011 and 2016, the growth rate was 27.2 percent, the ninth-highest among OECD countries.

The pace that is currently building is twice the growth rate, and as of 2019, the national debt is 741 trillion won, 39.4 percent of GDP. It is a trend that is growing very fast compared to the past. The predicted level is also negative. At this rate of increase, the company expects to generate about 900 trillion won in debt in 2022. This means that the economy is growing at 50.5 percent of GDP, a huge increase compared to the 2010s. Currently, the government's extra budget for the 2018-2022 fiscal operation plan is about 500 trillion won more than previously estimated 741 trillion won in national debt this year. According to the National Assembly Budget Office's "long-term fiscal outlook for 2030," the growth rate will reach 193.8 trillion won in 2040, 65.6 percent of GDP, 2,863.8 trillion won in 2050, and 85.6 percent of GDP. In the end, the government forecast that treasury bonds will accumulate as national debt to help the country's fiscal deficit grow, and the problem will continue to persist. As a result, Korea's fiscal health will deteriorate further," the report said. Currently, the economic growth rate is forecast to be 4 percent if inflation is reflected. A national liability, if used as a consumptive means to cover a fiscal deficit, could have a negative impact on the economy. First, an increase in the size of national debt could push interest rates up, building private capital, leading to a drop in investment and negatively impacting economic growth. Also, when repaid later, the burden may increase, leading to cuts or reductions in welfare or other infrastructure, negatively affecting economic growth, and negatively affecting the economy as it cannot prepare for future changes or other industries. In addition, there is also a problem with managing debt.

B. Inefficiency, inefficient management and low profitability of public enterprises

The growth of debt at public institutions is one of the serious problems under the current state debt situation in South Korea. According to the National Assembly Research Service, as of the end of 2014, the debt of public institutions stood at about 520.5 trillion won, which is very rapid in scale and proportion. Currently, state-run companies accounted for 72 percent of the total with 377.1 trillion won, quasi-government agencies accounted for 25 percent of the total with 130.2 trillion won, and other public institutions accounted for 3 percent with 13.2 trillion won. However, the top seven state-run companies in the state-run companies account for 96 percent of the total, with 360.2 trillion won The top seven state-run companies represent the seven with the highest debt scale. The seven state-run companies are Korea Land and Housing Corp., Korea Electric Power Corp., Korea Gas Corp., Korea Highway Corp., Korea National Oil Corp., Korea Railroad Corp. and Korea Water Resources Corp.

It can also be seen from the graph that the growth of the top seven public corporations is affecting the overall growth of public enterprises and the liabilities of the entire public institutions. Currently, the debt of state-run companies is growing very fast. Currently, many state-run companies hold more than a 50 percent stake in the government. This calls for state-run companies to declare default if they have no ability to repay their debts. But this puts the financial burden on the government, which will be on the government. Currently, 23 state-run companies represent a more than 200 percent surge in the five-year period from 82.7 trillion won in 2004 to 212.1 trillion won in 2009. In this paper, the main cause of the ballooning debt of the state-run company was highlighted by the problem of ballooning debt to the Korea Land and Housing Corp. In 2009, when the Korea Land & Housing Corp. was merged into Hanaro, its debt stood at 109.2 trillion won, accounting for 51.5 percent of the total public company debt.

A surge in public institutions' debt leads to the worsening of the nation's fiscal health, indicating that the top seven debt spikes have now worsened their fiscal health for the seven state-run companies. The National Assembly Research Service stressed the need to establish reduction measures for the liabilities of the top seven public corporations on this issue, while at the same time providing solutions for the government policy agency's role in the form and role of public corporations, regulation of utility charges, overseas resources development and increased facility investment in Korea. According to the Korea Institute of Public Finance, debt increased by 353 trillion won over the 15-year period from 1997 to 2012. In particular, Korea Land & Housing Corp. and Korea Electric Power Corp. saw a 65 trillion-won increase, accounting for 53 percent of the total increase. Public institutions' debt disclosure was analyzed by Choi Kwang-hae, head of the public policy bureau at the Ministry of Strategy and Finance, based on the disclosure of 12 major institutions.

First, for SOC public institutions, the increase began in 2004. This cited reasons for not developing or operating profit remaining, followed by the Korea Land and Housing Corp., Korea Railroad Corp., Korea Water Resources Corp. and Korea Highway Corp. They have worked in accordance with various development or government policies, but are unsuccessful or the unusual launch of their operations has accumulated an operating loss, which has increased their debt to be very serious. In particular, the Korea Land and Housing Corp. accounted for the largest portion, and its growth pace was the fastest. Next is the state-run energy agency. Energy utilities have increased rapidly since 2007. Professor Park Jin and Professor Huh Kyung-sun attributed the sharp increase to Korea Electric Power Corp.'s 56.4 trillion won, Korea Gas Corp. 23.5 trillion, Korea National Oil Corp.'s 14.3 trillion won, Korea Coal Corp.'s 1.9 trillion won and Korea Coal Corp.'s 0.2 trillion won, respectively In addition, the reasons were insufficient recovery rate of energy, lack of investment and operating loss, increase of foreign currency debt caused by attempts to attract or attract investment, and in the case of the Korea Coal Corporation, the structural deficit structure caused by high cost and low profit profile, and the state of total capital erosion. The increase in financial liabilities in public institutions was quite rapid, with the majority of the causes occurring in the four major rivers projects (Article 7.1), overseas oil development projects (Article 9.6), road projects (Article 15), new towns, housing sites (Article 14.3), housing rental projects (Article 19.4), power projects (Article 19.4), and the total deposit insurance fund (Article 10.2). Their combined financial debt is 131.4 trillion won. It accounts for 78.5 percent of the financial debt incurred by 12 public institutions. The subjects of the project are Korea Deposit Insurance Corp. (22.1), Korea Electric Power Corp. (30.6), Korea Land & Housing Corp. (43.2), Korea Gas Corp. (11.3), Korea National Oil Corp. (9.5), Korea Water Resources Corp. (7.1), and Korea Highway Corp. (7.6).

However, the current operating profits of 10 state-run companies stood at 4.3 trillion won in 2012, falling short of the 7.3 trillion won interest cost of debt.

The operating profit of the state-run company has been on a steady decline since 2002. Operating profit has been lower than interest costs since 2008. Park Jin and Huh Kyung-sun analyzed that public corporations' ability to repay is in fact dangerous. These public institutions are suffering from chronic deficits. Korea Electric Power Corp. posted a deficit of 1.744 trillion won in 2018, while Korea Hydro & Nuclear Power Co. posted a loss of 101.9 billion won. Energy public institutions came in 2018 and posted a deficit of 3.44 trillion won. According to the "Korea Finance 2018," released by the National Assembly Budget Office, 13 public institutions have posted chronic deficits amounting to 10 trillion won over the past five years. For your information, the institutions that have lost money are as follows. Korea National Oil Corp., Korea Coal Corp., Korea Workers' Compensation and Welfare Service, Korea Rail Network Authority, International Broadcasting Foundation, Seoul Arts Center, Korea Nanotechnology Institute, Korea Employment Information Service, Korea Academy of Sciences, Korea Academy of Sciences, Independence Hall, Social Security Information Center, Korea Social Welfare Council and Hanil Hospital, KEPCO Medical Foundation.

This can be attributed to a drop in management performance, increased losses from low oil prices, sluggish overseas resource development projects, and a decrease in asset value from the expectation of continued low oil prices. Another problem is higher pay compared to operating profit. The Korea National Oil Corp. is the highest among losses at 13 public agencies, with 8.85 trillion won or 92 percent, but its remuneration is more than the average remuneration of other public agencies as of 2016. It is a highly paid system that does not produce the right labor or profit, is inefficient and is wasteful of the wrong finances.

c. The financial problems of national pension, health insurance, and the relationship to national debt.

Another problematic public institution is health insurance and various pensions. Currently, health insurance and pensions are on the verge of running out of money. The financial structure of health insurance consists of health insurance premiums, state funding and other income. Expenditures include health insurance, payroll, administrative and operational expenses, and other expenses. The National Health Insurance Corp. posted a deficit of 3.8953 trillion won in 2018. The reason for recording deficits is that spending continues to increase. Health insurance spending stood at 27.5 trillion won in 2008, but it doubled to 52.6 trillion won in 2016. The current workable population is shrinking, while the pension and insurance benefits that the baby boomers have to pay as they retire are increasing. The Ministry of Strategy and Finance designated the National Pension Service's deficit-conversion period as 2044, and the period to be depleted as 2060. It designated that health insurance will shift to the red in 2022 and run out of money in 2030. The Ministry of Strategy and Finance published the "Long-term Financial Outlook for 1960," which is based on the article. According to the current data from the Ministry of Health and Welfare, the accumulated reserves of health insurance will plunge from 20.595 trillion won in 2018 to 11.08 trillion won in 2023. It also said that the balance of payments will continue to be in the red year after year. The financial status of the set-up fund for health insurance was seen as 2019 when it would turn into a deficit and the accumulated amount would be lowered.

According to Kim Yoon-hee (2017), the proportion of four major serious diseases (cancer, cerebrovascular disease, heart disease, and rare incurable diseases) in health insurance pay increased from 20.2 percent to 22.5 percent over the four years from 2012-2016. In addition, the proportion of salary costs also accounted for 8.7 percent of children aged 15 or younger in 2016, while those aged 65 or older accounted for 39.2 percent. This is an annual increase of 4.9 percent from 2012. Salary costs for senior citizens have increased 10.7 percent annually due to an increase in the elderly population, and are growing faster than those for children. Health insurance coverage is also on the rise. It targets 70 percent in 2022 from 63.4 percent in 2018. This means an increase in payroll costs and at the same time a government expansion in finances. There is an increase in the size of South Korea's national medical spending on the current rise in spending benefits, with the amount of spending rising 60-fold from 1.4 trillion won in 1980 to 82.9 trillion won in 2010. Some of the reasons are the separation of medicines, increased water prices and increased health insurance coverage (Kim Young-shin, Song Won-geun, 2013). Health insurance spending is on the rise in line with the rising cost of public health care. Health insurance spending rose about 2.6-fold from 14.7 trillion won in 2002 to 37.4 trillion won in 2011. It also shows that the health insurance budget is unstable as health insurance spending continues to show a fiscal deficit beyond health insurance income, despite continuing to rise from 4.77 percent in 2007 to 6.12 percent in 2016 and 6.24 percent in 2018 (Kim Young-shin, Song Won-geun, 2013). The government should support 20 percent of health insurance premiums paid by the private sector, but outstanding amounts to trillions of won over the past decade. An example of this was illustrated in the 2011 case in the paper. Imports of health insurance stood at about 38 trillion won, of which insurance premiums were 33 trillion won. In principle, the government should provide 7.6 trillion won. However, it provided 5 trillion won. For your information, the Act on the Financial Health and Health of National Health Insurance, a temporary law, expired at the end of 2006, and the Act on the Promotion of National Health Insurance and the Act on the Promotion of National Health was amended. Under the revised law, the amount of state funding was revised to 20 percent of the expected revenue from insurance premiums for the year (general account: 14 percent and health promotion fund: 6 percent).

Causes include an increase in the portion of the elderly population, the introduction of new drugs and state-of-the-art medical devices, service costs and increased demand. The number of subscribers to health insurance is on the rise (increasing from 47.29 million in 2005 to 49.3 million in 2011), with the portion of job subscribers growing. In the case of the National Pension Service, the problem seems to be gradually deepening. Park Neung-hoo claimed that the national pension fund has unstable finances in the long term. If things continue as they are, the initial balance of payments will be incurred in 2036, and the reserve fund will run out in 2047. At present, it was the most important thing to come up with a fund management plan that effectively manages pension funds for the sake of low, high compensation and long-term pension funds. In the picture, the reserve fund peaked in 2036, and then went down sharply. This shows that the current problems of the national pension fund are fiscal management and fund issues. The National Pension Service has continued to improve the National Pension Act in 2007 in a way that addresses low-cost, high-paying issues, but has still failed to address the risks of fiscal hardship. It is also suspected of the long-term sustainability of the national pension fund's fiscal health as the low birthrate and aging population worsen.

Currently, funding for reserves is steadily piling up. As can be seen in the picture next to it, it can be seen that the reserve fund continues to accumulate from 2007 to 2043. However, the elderly population is on the rise, and the younger population is running out of financial funds now that it has entered an age of low birth rates and aging. As can be seen in the above figure, the reserve fund's reserves peak until 2043, but the reserve fund continues to decline since 2043, and forecasts that the reserve fund will run out in 2060. Kim Young-shin and Song Won-geun said the number of current recipients of the national pension program is soaring from about 950,000 in 2001 to about 3.35 million in 2013. In line with the surge in recipients, the amount of salary spending also rose sharply from 1.5693 trillion won in 2001 to 11.55 trillion won in 2013. At this time, they account for around 80.7 percent of the total payroll expenditure, while recipients account for 78.5 percent of the total recipients. In the national pension fund, the amount of salary spending on old-age pensions increased about 10-fold from 973.6 billion won in 2001 to 9.271 trillion won in 2013. The number of subscribers increased five-fold from about 4.4 million in 1988 to 2.0 million in 2013. According to the 2013 National Pension Service's third fiscal estimate, if the current system is maintained, the reserve fund will increase to about 2,561 trillion won by 2043, and the reserve fund will be depleted after 2060.

3. Discussion on the Resolution of the Korean National Debt

1. An Analysis on the Solutions to the Problems of National Debt in Korea

At present, the country's debt problem is to reduce the pace of growth, and at the same time, it must address its fiscal management style. Since the Asian financial crisis, national debt has been growing at a fairly rapid pace. Hwang Seong-hyun (2010) said, "The government should address the issue of low birth rate and aging population through welfare spending in the direction of fiscal policy." Currently, South Korea's social welfare spending against GDP stood at 9.4 percent as of 2012, 10.5 percent as of 2014 and 11.5 percent as of 2016. It ranked 34th, the lowest among OECD countries except Mexico (as of 2016). Professor Hwang Sung-hyun said, "While welfare spending shows a steady increase, even if the funds increase steadily due to the limited resources of the welfare delivery system, they will not be able to meet the increasing welfare expenditure, and the low birthrate and aging problem will not be able to be solved." As a solution to this problem, it is suggested that it is 'investment in people' through system reform. This is an investment for the future, and it is an investment to cope with changes in the overall population structure of Korean society in a low birth rate and aging society, unlike investment for industrial development. It also pointed out the issue of education. Among the currently mentioned measures to tackle the low birthrate is to reduce the pain of education by improving the quality of public education and easing the burden on private education. In order to prevent an aging society, the state should actively and directly shoulder the cost of children and prepare for the burden of old age (such as pension, cost of living, and preparation for various diseases). We need to strengthen the system on the two issues and come up with solutions through support. In particular, the burden on the people increases. However, the government should increase investment for the future and let the public know that it is a problem that can be overcome. Even if the burden on the people increases, they should be convinced that it is a more urgent task for investment and economic growth for the future. On the other hand, tax revenues should be increased to prevent worsening of fiscal health. In the process of budgeting, wasteful or excessive compilation should be banned, and tax-cut policies should be implemented more cautiously. The current tax burden ratio is very low. It continued to rise, recording 17.9 percent in 2013, 18.5 percent in 2015 and 20 percent in 2017, but still falls far below the OECD average of 25.1 percent in 2014 (Korea: 18 percent, Norway: 28.8 percent, Sweden: 32.9 percent). Professor Hwang Sung-hyun once claimed that if the tax burden ratio increases to 21 percent, it could increase revenue by as much as 20 trillion won. The way to increase the tax burden ratio is to strengthen taxation on negative tax evasion income, to strengthen property holding tax, to reduce and abolish tax cuts, and to strengthen taxation on the top tier. There is a way to prevent wasteful spending in spending to raise fiscal soundness again. There are measures to strengthen the evaluation system for budget projects and manage state-run companies in the course of fiscal spending. Although the preliminary feasibility study system was introduced in 1999, the effect is still minimal. In fact, four-river project in the process of experts and environmental groups are already negative despite the fact that the river Lee Myung-bak government policies. As a result, the efficacy of preliminary feasibility study was weakened, and the four major rivers wasted only nearly 21 trillion won in budget and rather only increased the damage in the region. On budget projects, too, little assessment has been made as to whether budget projects have been executed well, set to performance or limitation, and achieved. As a result, the result is that the government does not achieve efficiency in fiscal spending while not paying attention to the settlement of fiscal This leads to a vicious circle in which distrust in the budget continues to escalate. Hwang Sun-hyun (2010) presented inefficient and unsystematic problems that occur sporadically in the government in matters of assessment and management in budget projects. To address this, there are new systematic functions of assessment and management of budget projects, and ways to greatly enhance the functions of assessment and management. To prevent waste in budget projects, Professor Hwang Sung-hyun proposed the creation of a new Ministry of Finance. Another management method, Shin Sung-hoon (2010), outlined six different ways to manage public finances. 1. Financing, rationally allocating, and managing the government's work in accordance with the Constitution and legal regulations so as to be able to carry out it in a stable and sustained manner (management of the sustainability of the finances). 2. Securing democratic control over the use of public funds. 3. Towards minimal national burden. 4. Improving economic efficiency, efficiency, and effectiveness in the use of public resources. 5. Protection from loss, misuse, abuse, and loss of public resources. 6. Ensuring accountability and transparency in the use of public resources. I put these six things together. Currently, the government does not have financial rules in place in the process of budgeting. Financial regulations detect financial risks and require an accurate, defined and effectively independent monitoring system of the goals and ranges of the rules. And it is important to include strict compliance mechanisms and exceptions. The importance of fiscal standards is that the European Economic and Monetary Union (EMU) presented the five key requirements needed in establishing budget policies for the reorganization of the fiscal system.

Because these are items that can have a budget impact, specific rules should be created for them. The six things that Shin Seung-hoon (2010) has outlined will help reduce the nation's debt problem by solving the problem of fiscal management. As a result, to solve the problem of Korea's national debt, the readjustment of fiscal operations, expansion of economic growth, prevention of waste, loss, improvement of fiscal soundness and increased fiscal transparency can help ease anxiety about fiscal operations, increase tax revenues and increase future investment, waste in budgeting according to fiscal standards, and prevent errors.

B. Conclusions on the Resolution of the Korean National Debt

At present, what we need to address in national debt is the pace of growth of national debt and the prevention of excessive fiscal management. The total revenue of the 2018 budget plan reached 447.1 trillion won, up 7.9 percent from the previous year's main budget. Spending was tallied at 429 trillion won in 2018. Compared to the previous year's main budget, this is a 7.1 percent increase. Among them, the largest portion is in the health, welfare and employment sectors, accounting for 146.2 trillion won (12.9 percent). The report said the company plans to make major investments in health, welfare, employment and national defense. The national debt currently stands at 38.3 percent and 626.9 trillion won in terms of GDP. General government debt came to 43.8 percent of GDP, 717.5 trillion won, and public sector debt came to 1,036.6 trillion won against GDP, 63.3 percent, the survey showed. Currently, social services such as welfare, education, and national defense are continuously being provided. At the same time that the social welfare network is meaningful in expanding, the nation's burden from mounting debt is increasing, and the domestic market is feared to suffer a slump. The domestic market is determined by domestic consumption, with the current tax burden ratio exceeding 20 percent, a steady increase in the people's taxes may encourage a sense of crisis for the domestic market. However, the figure is significantly lower than in other countries, and at the same time, the welfare level is significantly lower. It is now being raised, and after all, the burden comes from taxpayers' money. But from a future perspective, we have to convince ourselves that welfare growth is a future-ready investment, redistribution to the people. However, the continued increase in budget spending is one of the negative factors. This means an increase in national debt, and is proof that it continues to pile up. Still, past national debt has not been a big problem through what is now discussed. But now is the time to prepare. Increased tax burden and higher tax rates at the top,

III. CONCLUSION

1. Progress and Summary of the paper

In this paper, we examined the problems of Korea's national debt and discussed whether it was a problem or not. First, I gave a basic explanation of the national debt. We discussed the definition, characteristics and types of national debt. The current state of Korea's national debt was then analyzed in terms of progress, positive and negative. On the positive side, it was mainly described in the context of skepticism about the seriousness of the problem. At present, Korea's national debt problem is not serious about Korea's national debt problem, as it has a very low amount compared to the OECD average or other advanced countries, and the IMF has a positive position on stable and sustained financial management, and both external and sovereign credit ratings have been estimated to be above grade A. On the other hand, on the negative side, it focuses on future perspectives, exponentially increasing over the past, and increasing problems. It was mainly caused by low taxes and low welfare for low national debt, and recorded very low amounts compared to the OECD average for social welfare spending or other countries. Currently, Korea is on a low tax rate, criticizing the country for always lacking in finances. The tax burden and the national burden are implemented in a way that is totally out of step with other countries and Korea's financial situation, and the tax burden is barely over 20 percent in 2018. However, the extent of tax walking, which is not suitable for financial management, induced an increase in the national debt, which resulted in a repetition of the vicious cycle as a result of the burden on the people. He also raised questions in terms of the government's policies. It described the problems of the government's public corporations, health insurance and the national pension. The government's economic policies applied by, four rivers that were pushing Lee Myung-bak administration policies, 747 about tax cut policy problems, promise.And its connections for the increase in national debt to problems. On problems with state-run companies, he criticized them mainly for their financial waste, increased fiscal deficits stemming from policy failures, and inefficient fiscal and corporate management methods. It also analyzed the depletion of funds for the national pension and health insurance. Currently, the national pension and health insurance are constantly piling up, but experts and the government expect the reserve fund to turn into a deficit from 2044, and to be completely depleted by 2060. Health insurance is also expected to go in this way, and the timing will be in the red in 2022 and run out in 2025. On the reason why the government is continuously worried about a decrease in the reserve fund, it pointed out that it is a low birthrate and aging problem, and it has become a serious social problem to date. In order to solve such serious social problems and national debt problems, we should first step up investment for the future." Investment for the future is mainly related to social welfare services such as welfare and education. In addition, fiscal soundness, transparency and the preparation and compliance of fiscal rules will be cited as the main pillars of the nation's current fiscal and economic growth, while at the same time advancing the nation's fiscal management system. And it will have a long-term and future impact on the reduction of national debt.

2. Conclusion

Currently, Korean national debt is not a serious problem. Foreign credit ratings and internal and external reactions in Korea are rather favorable to Korea's financial status. Of course, there are voices of concern about the potential of Korea's financial status. Nor is the economic crisis proportional to the national debt. It continued to rise, recording 17.9 percent in 2013, 18.5 percent in 2015 and 20 percent in 2017, but still falls far below the OECD average of 25.1 percent in 2014 (Korea: 18 percent, Norway: 28.8 percent, Sweden: 32.9 percent). Professor Hwang Sung-hyun once claimed that if the tax burden ratio increases to 21 percent, it could increase revenue by as much as 20 trillion won. The way to increase the tax burden ratio is to strengthen taxation on negative tax evasion income, to strengthen property holding tax, to reduce and abolish tax cuts, and to strengthen taxation on the top tier. There is a way to prevent wasteful spending in spending to raise fiscal soundness again. There are measures to strengthen the evaluation system for budget projects and manage state-run companies in the course of fiscal spending. Although the preliminary feasibility study system was introduced in 1999, the effect is still minimal. In fact, four-river project in the process of experts and environmental groups are already negative despite the fact that the river Lee Myung-bak government policies. As a result, the efficacy of preliminary feasibility study was weakened, and the four major rivers wasted only nearly 21 trillion won in budget and rather only increased the damage in the region. On budget projects, too, little assessment has been made as to whether budget projects have been executed well, set to performance or limitation, and achieved. As a result, the result is that the government does not achieve efficiency in fiscal spending while not paying attention to the settlement of fiscal This leads to a vicious circle in which distrust in the budget continues to escalate. Hwang Sun-hyun (2010) presented inefficient and unsystematic problems that occur sporadically in the government in matters of assessment and management in budget projects. To address this, there are new systematic functions of assessment and management of budget projects, and ways to greatly enhance the functions of assessment and management. To prevent waste in budget projects, Professor Hwang Sung-hyun proposed the creation of a new Ministry of Finance. Another management method, Shin Sung-hoon (2010), outlined six different ways to manage public finances. 1. Financing, rationally allocating, and managing the government's work in accordance with the Constitution and legal regulations so as to be able to carry out it in a stable and sustained manner (management of the sustainability of the finances). 2. Securing democratic control over the use of public funds. 3. Towards minimal national burden. 4. Improving economic efficiency, efficiency, and effectiveness in the use of public resources. 5. Protection from loss, misuse, abuse, and loss of public resources. 6. Ensuring accountability and transparency in the use of public resources. I put these six things together. Currently, the government does not have financial rules in place in the process of budgeting. Financial regulations detect financial risks and require an accurate, defined and effectively independent monitoring system of the goals and ranges of the rules. And it is important to include strict compliance mechanisms and exceptions. The importance of fiscal standards is that the European Economic and Monetary Union (EMU) presented the five key requirements needed in establishing budget policies for the reorganization of the fiscal system.

Because these are items that can have a budget impact, specific rules should be created for them. The six things that Shin Seung-hoon (2010) has outlined will help reduce the nation's debt problem by solving the problem of fiscal management. As a result, to solve the problem of Korea's national debt, the readjustment of fiscal operations, expansion of economic growth, prevention of waste, loss, improvement of fiscal soundness and increased fiscal transparency can help ease anxiety about fiscal operations, increase tax revenues and increase future investment, waste in budgeting according to fiscal standards, and prevent errors.

B. Conclusions on the Resolution of the Korean National Debt

At present, what we need to address in national debt is the pace of growth of national debt and the prevention of excessive fiscal management. The total revenue of the 2018 budget plan reached 447.1 trillion won, up 7.9 percent from the previous year's main budget. Spending was tallied at 429 trillion won in 2018. Compared to the previous year's main budget, this is a 7.1 percent increase. Among them, the largest portion is in the health, welfare and employment sectors, accounting for 146.2 trillion won (12.9 percent). The report said the company plans to make major investments in health, welfare, employment and national defense. The national debt currently stands at 38.3 percent and 626.9 trillion won in terms of GDP. General government debt came to 43.8 percent of GDP, 717.5 trillion won, and public sector debt came to 1,036.6 trillion won against GDP, 63.3 percent, the survey showed. Currently, social services such as welfare, education, and national defense are continuously being provided. At the same time that the social welfare network is meaningful in expanding, the nation's burden from mounting debt is increasing, and the domestic market is feared to suffer a slump. The domestic market is determined by domestic consumption, with the current tax burden ratio exceeding 20 percent, a steady increase in the people's taxes may encourage a sense of crisis for the domestic market. However, the figure is significantly lower than in other countries, and at the same time, the welfare level is significantly lower. It is now being raised, and after all, the burden comes from taxpayers' money. But from a future perspective, we have to convince ourselves that welfare growth is a future-ready investment, redistribution to the people. However, the continued increase in budget spending is one of the negative factors. This means an increase in national debt, and is proof that it continues to pile up. Still, past national debt has not been a big problem through what is now discussed. But now is the time to prepare. Increased tax burden and higher tax rates at the top,

III. CONCLUSION

1. Progress and Summary of the paper

In this paper, we examined the problems of Korea's national debt and discussed whether it was a problem or not. First, I gave a basic explanation of the national debt. We discussed the definition, characteristics and types of national debt. The current state of Korea's national debt was then analyzed in terms of progress, positive and negative. On the positive side, it was mainly described in the context of skepticism about the seriousness of the problem. At present, Korea's national debt problem is not serious about Korea's national debt problem, as it has a very low amount compared to the OECD average or other advanced countries, and the IMF has a positive position on stable and sustained financial management, and both external and sovereign credit ratings have been estimated to be above grade A. On the other hand, on the negative side, it focuses on future perspectives, exponentially increasing over the past, and increasing problems. It was mainly caused by low taxes and low welfare for low national debt, and recorded very low amounts compared to the OECD average for social welfare spending or other countries. Currently, Korea is on a low tax rate, criticizing the country for always lacking in finances. The tax burden and the national burden are implemented in a way that is totally out of step with other countries and Korea's financial situation, and the tax burden is barely over 20 percent in 2018. However, the extent of tax walking, which is not suitable for financial management, induced an increase in the national debt, which resulted in a repetition of the vicious cycle as a result of the burden on the people. He also raised questions in terms of the government's policies. It described the problems of the government's public corporations, health insurance and the national pension. The government's economic policies applied by, four rivers that were pushing Lee Myung-bak administration policies, 747 about tax cut policy problems, promise. And its connections for the increase in national debt to problems. On problems with state-run companies, he criticized them mainly for their financial waste, increased fiscal deficits stemming from policy failures, and inefficient fiscal and corporate management methods. It also analyzed the depletion of funds for the national pension and health insurance. Currently, the national pension and health insurance are constantly piling up, but experts and the government expect the reserve fund to turn into a deficit from 2044, and to be completely depleted by 2060. Health insurance is also expected to go in this way, and the timing will be in the red in 2022 and run out in 2025. On the reason why the government is continuously worried about a decrease in the reserve fund, it pointed out that it is a low birthrate and aging problem, and it has become a serious social problem to date. In order to solve such serious social problems and national debt problems, we should first step up investment for the future." Investment for the future is mainly related to social welfare services such as welfare and education. In addition, fiscal soundness, transparency and the preparation and compliance of fiscal rules will be cited as the main pillars of the nation's current fiscal and economic growth, while at the same time advancing the nation's fiscal management system. And it will have a long-term and future impact on the reduction of national debt.

2. Conclusion

Currently, Korean national debt is not a serious problem. Foreign credit ratings and internal and external reactions in Korea are rather favorable to Korea's financial status. Of course, there are voices of concern about the potential of Korea's financial status. Nor is the economic crisis proportional to the national debt. Indeed, Latin American countries are always facing a dangerous situation in the economic crisis, even though they account for 35 percent to 45 percent of their national debt. In addition, Japan has no risk of an economic crisis, even though it has a national debt ratio of 226 percent, and rather maintains high reliability in the international financial market. Despite the fact that the U.S. also has as much debt as the U.S., its confidence in state bonds, as well as the economy, remains very high. These examples show that an economic crisis can always come, regardless of Korea's national debt ratio. Ultimately, economic growth and economic crisis determine many economic factors that can grow, including the growth of the current account, the degree of national economic fundamentals, and external creditworthiness However, the level of national debt has nothing to do with economic growth or crisis. Currently, credit rating agencies due to Japan's sovereign debt have been downgraded or are considered to have the highest national debt ratio and at the same time dangerous However, the prevailing view is that the government has done a good job of managing its debt. Credit rating agencies also trust the current financial status and how they operate in Korea, so they are all rated above A by S&P, Moody's and Fitch.

The figure below is the amount due to the maturity of the treasury bonds and the amount due each year. The figure above shows that the expected maturity amount is not very large to date, and has been on a steady low decline since 2019. However, the nation's debt is soaring at the moment. The amount due is substantial. In other words, looking at the rate and amount of increase now and the amount due at maturity, the fact that in the future there is no change. As the pace of increase is now increasing, from a future perspective, the amount of national debt will be substantial. Looking at the growing trend of foreigners holding treasury bonds, Korea should continue to calculate and evaluate the present through past cases and make better results in preparation for the future. At present, the national debt should be constantly monitored for finances, advanced management systems, and analyzed and prepared for investment trends. The government should decide whether to issue the national debt carefully, and issue treasury bonds to the extent that they will not go too far in its finances. This could affect the market interest rate of South Korea's treasury bonds in the government bond market less. Less affected is a stable national bond compared to other countries and can be recognized as an attractive market at the same time. This recognition will serve as the basis for future fiscal expansion due to increased investment by foreign investors and increased investment by local investors. It is also important to make early repayment of government bonds Through early repayment, the surplus tax revenue of the national treasury can be used efficiently, at the same time it can reduce the lax running of its finances, and reduce the burden on creditworthiness and maturing debt. The government should prepare for the Korean debt in a way that it is prepared for the future. Facing serious problems that may arise in the future, we should address the problem with the current rate of increase. At present, the government should strengthen social welfare services, mainly welfare and education, to give a big boost to the overall domestic market, while at the same time striving to achieve the national fiscal balance. To foster potential potential, the government should improve and assess the ongoing fiscal system, and spend its finances as efficiently as possible for Korea's "in-tax spending." Korea should evaluate its budget projects carried out in the past, look back from many perspectives, including effectiveness, significance, limitations, performance and achieving goals, and take this as a mirror to its budget projects.

Currently, South Korea faces serious problems over its newly ballooning national debt. Unlike previous economic problems, this is a growing problem and a serious situation involving a number of economic factors. Although the problem may seem feeble in Korea, in the future, it could develop into a problem that could have an adverse impact on the Korean economy as a whole. In order to solve the problem, the balance in finance, or what can be prevented further, must be prevented. We should take a serious look at the problem of national debt at present and try to solve it by looking anew at social problems (such as low fertility, aging population, regional gaps, etc.) related to financial management and soundness and economic problems. The government should operate flexibly in the minimization of government debt and in the management of state-run companies and finances. In the government, the government's current spending and fiscal size are growing due to increased welfare spending. However, only when the government makes a firm investment in efficient and future preparedness will the national debt issue proceed without serious consequences and at the same time will it be a factor that will determine the success or failure of the entire national economy. In response, taking a future view of the national debt, the government should come up with countermeasures through progress and at the same time proceed with investment for the future so that the problem of the national debt can be brought under control.


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© 2019 Maddest Economist

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