Gyeonggi Province Governor Lee Jae-myung calls remarks by People Power Party leader Ahn Chul-soo "absurd statements"

[Suwon Ilbo=Reporter Park No-hun] Gyeonggi Province Governor Lee Jae-myung has made scathing remarks against People Power Party leader Ahn Chul-soo, calling his comments "absurd statements" after Ahn criticized President Moon Jae-in.

According to Governor Lee's social media post on the 4th, through a message titled "Representative Ahn, why is government bond issuance for household support and economic recovery unfilial?", the governor directly rebutted Ahn's characterization of the Moon administration as an "unfilial government," calling it an "absurd statement."

Governor Lee stated, "As we face an economic crisis due to oversupply, insufficient demand, and COVID-19, even countries with higher national debt ratios than ours are accepting 10-30 percent increases in their debt ratios and expanding fiscal expenditure to support household income and consumption. Unlike foreign countries, our national debt ratio is unnecessarily low while households are burdened with the worst debt. Clinging to the mythical 40 percent national debt ratio, we have ignored household income support, resulting in household debt reaching record highs."

He continued, "Is issuing slightly more government bonds—far less than other countries—during an economic crisis to suppress household debt increase and achieve economic recovery unfilial? Rather, isn't it unfilial to avoid necessary government bond issuance for household support and economic recovery under the guise of maintaining excessive fiscal soundness, thereby damaging the real economy?"

Governor Lee concluded by stating, "'Unfilial conduct' is not the Moon Jae-in administration, which is committed to overcoming this crisis to revive the economy and people's livelihoods, but rather Representative Ahn and the conservative opposition, who have no regard for the people and engage in partisan politics to undermine national governance. I truly hope you will return to the original spirit of those days when you raised the banner of 'new politics' and carried the hopes of the nation."

Below is the full text of Governor Lee Jae-myung's SNS post.

<Representative Ahn, why is government bond issuance for household support and economic recovery unfilial?>

Representative Ahn Chul-soo of the People Power Party has been disparaging President Moon Jae-in, saying "you are adopting Park Geun-hye's laser-focused gaze, you are a stubborn president," and has now made the absurd statement that the Moon Jae-in government is "an unfilial government that borrows money to take credit and leaves the debt for future generations to pay."

First, I would like to remind the representative that no matter how much of a political opponent one may be, the president is the representative of 50 million citizens, including yourself, chosen by them all, and this fact should not be forgotten.

During economic downturns, all nations accept increases in government debt and expand fiscal expenditure to achieve economic recovery. Since primary income distribution through industrial activities is insufficient, the government implements secondary distribution (transfer income) through taxation and fiscal expenditure, and secondary distribution continues even as national debt increases. This is because when household income decreases, consumption and demand fall, leading to reduced investment and supply, which brings about economic stagnation.

Even now, facing a severe economic crisis due to structural oversupply, insufficient demand, and COVID-19, countries with national debt ratios 2-3 times higher than ours are accepting 10-30 percent increases in their debt ratios and are substantially issuing government bonds to expand fiscal expenditure and support household income and consumption.

However, there is a close relationship between national debt, household debt, and transfer income. When transfer income increases, household debt decreases and national debt increases; when transfer income is low, the opposite occurs.

The ratio of transfer income to GDP in Korea is 11.1 percent, which is the lowest—half of the OECD average of 20.1 percent—and the national debt ratio is also the lowest at 35.9 percent, less than half of the OECD average of 81.6 percent. Meanwhile, the household debt ratio is 184.2 percent, which is the highest—58.4 percentage points higher than the OECD average of 125.8 percent. (2018)

In other words, unlike foreign countries, as a result of sparing household support, our national debt ratio is unnecessarily low while households are burdened with the worst debt. It is similar to a household where a father became wealthy by cutting back on children's education expenses, but all his children became debtors.

While OECD nations manage high national debt ratios, during economic crises they increase national debt and adopt expansionary fiscal policies to raise transfer income and stably manage household debt. However, we have been fixated on the mythical 40 percent national debt ratio, ignored household income support, and as a result, household debt is now reaching record highs.

I would like to ask Representative Ahn:

Is it unfilial to issue slightly more government bonds—far less than other countries—during an economic crisis to suppress household debt increases and achieve economic recovery?

Rather, isn't it unfilial to maintain excessive fiscal soundness and avoid the necessary government bond issuance for household support and economic recovery, thereby damaging the real economy?

What has changed is not the president's gaze, but rather your gaze, Representative.

'Unfilial conduct' is not the Moon Jae-in administration, which is committed to overcoming this crisis to revive the economy and people's livelihoods, but rather you, Representative Ahn, and the conservative opposition, who have no regard for the people and engage in partisan politics to undermine national governance. I truly hope you will return to the original spirit of those days when you raised the banner of 'new politics' and carried the hopes of the nation. (End)