This topic is trending as South Korea, like many developed nations, faces increasing national debt and concerns about its long-term impact on younger generations. The post offers a fresh, controversial perspective that challenges conventional wisdom, sparking intense debate among netizens.
A recent online post in Korea has sparked a heated debate, challenging the common belief that national debt unfairly burdens future generations. The original poster shared a compelling argument from a book, suggesting that the issue is far more nuanced than simply 'passing the buck' to our kids.
The core idea is this: if the government issues 100 trillion won in 30-year national bonds to stimulate the economy, someone buys those bonds as an asset. When the bonds mature, the future generation, having inherited these 100 trillion won worth of bonds from their parents, uses them to repay the national debt. But wait, there's more! They also inherit all the tangible results of their parents' investments – think roads, power plants, dams, airports, and even advanced AI infrastructure and scientific know-how. The poster argues that the real problem isn't 'intergenerational burden transfer' but rather 'intra-generational inequality' – how the burden is distributed *within* a generation. They're convinced by this idea and are asking for any flaws in the logic.
🇰🇷 KOREAN REACTIONS 10
1. We can't assume that those who inherit national bonds are the same people who bear future taxes for their repayment. It's a rough distinction, but the rich inherit, and both rich and poor bear taxes. 2. The 100 trillion won raised by bonds must necessarily be converted into infrastructure and technology that boosts future productivity, but it could just be simple transfer payments or inefficient spending. 3. Even domestically held national debt can cause problems like tax transfers within future generations, fiscal rigidity, and crowding-out effects. Decision-making becomes systematically restricted. Japan clearly demonstrates this. 4. The accounting fact that assets and liabilities are equal in total doesn't mean there's no real burden on welfare, distribution, or growth. This is essentially a summary of points 1, 2, and 3.
1. Do our ancestors pay the interest? 2. Funds raised by debt don't always lead to CAPEX investments transferable to future generations. There's a lot of inefficiently wasted budget and costs like basic pensions that the older generation just consumes. 3. Is the public infrastructure created that way really cost-effective? Look at the ridiculous public projects planned for political reasons. 4. Even infrastructure, the result of CAPEX, isn't free to maintain and has a limited lifespan. 5. The biggest problem: with a shrinking population, future generations will struggle to roll over that much debt, and they might not even need the scale of infrastructure invested by the current generation. It's just imagination, but if you asked the younger generation to decide, they'd probably say 'don't take out loans' instead of 'we're leaving you infrastructure nonsense.'
If we're talking about debt, we need to talk about assets too, not just debt. Why do people only think about leaving debt behind??? As if there are no benefits. FYI, 2025 financial results are out. National assets 3500 trillion won, national debt 2771 trillion won, net assets 812 trillion won. We should be saying that while debt increased, net assets also increased. Debt is growing, but it's not unmanageable, and we're continuously making profits or reducing debt.
This book seems to be about what I've always thought. 'If the nation's senior citizens built social infrastructure with 500 trillion won in taxes and bonds, then future generations should bear some of that burden.' The nation doesn't just pass on the burden of national debt; it also leaves behind excellent social infrastructure. Highways, KTX, GTX, subways, bridges, dams, nuclear power plants – all these social infrastructures are assets created by the older generation through taxes and national bonds. Future generations use facilities built with the funds and efforts of their seniors almost for free.
There's no info on how the government procured that 100 trillion won at the time of repayment. What's the book title, by the way?
@Commenter Reality is, they usually roll it over (refinance). But even if we assume repayment, the point is that the funds for repayment exist within the economic system (the 100 trillion won in national bonds inherited from dad). Book title is 'Power of Money,' American author, can't remember the name.
@Laplace's_Demon To understand the problem clearly, let's assume no realistic rollover. National bonds received from parents are household financial assets. I don't get why that becomes a repayment source for government debt.
@Commenter Of course, that specific bond won't have a 'for repayment' label, but it means there's 100 trillion won worth of debt repayment funds within the economic system. You get confused if you separate individual or corporate balance sheets from the integrated financial statements of the economic system, when they're just subsets.
They say economic growth makes debt melt away with inflation, but Japan is a counterexample, right? The SOC (Social Overhead Capital) built during the bubble era is old and useless now (maintenance costs exceed its utility), but interest payments are 25% of the national budget. You can't just ignore coupon rates.
So the bigger the national bond issuance, the better, I guess?