Gyeonggi Province Governor Lee Jae-myung to People Power Party Leader Ahn Cheol-soo: "You've Made Reckless Remarks"

[Suwon Ilbo=Reporter Park No-hun] Gyeonggi Province Governor Lee Jae-myung made forthright remarks against People Power Party Leader Ahn Cheol-soo, calling his criticism of President Moon Jae-in "reckless."

According to Governor Lee's SNS on the 4th, through a post titled "Representative Ahn, why is government bond issuance for household support and economic recovery unfilial?", the governor denounced Representative Ahn's remarks calling the government "unfilial" as "reckless."

Governor Lee stated, "Now that we face an economic crisis with oversupply and insufficient demand compounded by COVID-19, even countries with higher government debt ratios than ours are expanding fiscal spending to support household income and consumption while accepting increases in government bond ratios of 10-30 percent. Unlike foreign countries, our national debt ratio is unnecessarily low while households are burdened with the worst debt. As a result of ignoring household income support while clinging to the myth of a 40 percent national debt ratio, household debt is reaching all-time highs," explaining the domestic situation.

He continued, "Is issuing slightly more government bonds—far less than other countries—to suppress household debt increases and revive the economy during an economic crisis unfilial? Rather, isn't it unfilial to avoid necessary government bond issuance for household support and economic recovery under the guise of maintaining already excessive fiscal soundness, thereby destroying people's livelihoods?" directly refuting Representative Ahn's claims.

Governor Lee concluded, "What 'exceeds boundaries' is not the Moon Jae-in administration dedicated to overcoming crises to revive the economy and people's livelihoods, but you, Representative Ahn, and the conservative opposition party, who obstruct national affairs through factional interests without regard for the people. I sincerely hope you return to the original spirit of those days when you held high the banner of new politics and bore the people's expectations on your shoulders."

The following is the full text of Governor Lee's SNS post:

<Representative Ahn, Why Is Government Bond Issuance for Household Support and Economic Recovery Unfilial?>

Representative Ahn Cheol-soo of the People Power Party made malicious remarks against President Moon Jae-in saying "You're beginning to resemble Park Geun-hye's laser-focused glare, you're a contrarian president," and then made reckless statements calling the Moon Jae-in administration a "unfilial government that borrows money to take credit and forces future generations to repay."

First, I hope you will not forget that the president, regardless of political opposition and personal feelings, is a representative of the state chosen by fifty million people, including yourself.

During economic downturns, all nations increase fiscal spending for economic recovery while accepting increases in government debt. Since adequate income distribution from primary distribution in industrial settings is insufficient, the government implements secondary distribution (transfer income) through taxation and fiscal spending, which continues despite increasing national debt. When household income decreases, consumption and demand decline, followed by investment and supply, leading to economic downturn.

Even now, facing a serious economic crisis with trending oversupply and insufficient demand compounded by COVID-19, even countries with national debt ratios 2-3 times higher than ours are accepting increases in government bond ratios of 10-30 percent, issuing large amounts of government bonds, and expanding fiscal spending to 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.

Our transfer income ratio to GDP is 11.1%, the lowest at half the OECD average (20.1%), and our national debt ratio is also the lowest (35.9%), less than half the OECD average (81.6%), while our household debt ratio is 184.2%, the highest, a whopping 58.4 percentage points higher than the OECD average (125.8%). (2018)

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

OECD nations, even with high government debt ratios, increase national debt during economic crises, raise transfer income through expansionary fiscal policy, and stably manage household debt. However, we remain fixated on the mythical 40 percent national debt ratio, and as a result of ignoring household income support, household debt continues to reach all-time highs.

I would like to ask Representative Ahn:

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

Rather, isn't it unfilial to avoid necessary government bond issuance for household support and economic recovery under the guise of maintaining already excessive fiscal soundness, thereby destroying people's livelihoods?

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

'What exceeds boundaries' is not the Moon Jae-in administration dedicated to overcoming crises to revive the economy and people's livelihoods, but you, Representative Ahn, and the conservative opposition party, who obstruct national affairs through factional interests without regard for the people. I sincerely hope you return to the original spirit of those days when you held high the banner of new politics and bore the people's expectations on your shoulders. (End)