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[Editorial] Korea Should Learn From Obama`s Plan

Posted November. 27, 2008 03:09,   


U.S. President-elect Barack Obama announced yesterday his strong commitment to budget reform, saying his administration will go through the federal budget "page by page, line by line," eliminating unnecessary programs. He also pledged to push for a large economic stimulus package of up to 700 billion U.S. dollars over the first two years of his term to turn around the ailing U.S. economy. While seeking bold fiscal policies to reduce the pain coming from a recession, the incoming administration will tighten its belt by using tax money in a sensible and cost-effective way, Obama said. With this pledge, Obama not only showed courtesy to American taxpayers but also presented the right way to maximize the effects of the massive stimulus package.

Obama calls budget reform the top priority of his administration since the two top U.S challenges are the snowballing budget deficit and the slumping economy. The same goes for the Korean government. The Lee Myung-bak administration has also tried to rev up the economy and create jobs by expanding state spending. To meet their goals, the Korean government and the National Assembly must carefully choose necessary programs while boldly eliminating inefficient ones. Despite fiscal soundness, the government should issue national bonds to finance the budget plan for next year. If the economy grows less than two percent next year as the government forecast, no job creation is expected and tax revenues will decrease.

Amid this grave situation, lawmakers are engrossed in setting aside state funds for their constituencies, even dipping into emergency budgets earmarked for economic contingencies. Opposition lawmakers, who advocate spending cuts, have also joined in the scramble to get money for their own interests. The National Assembly must weed out pork-barrel projects from the 2009 budget bill, whose value was increased more than 10 trillion won (6.76 billion dollars) after standing committee deliberation. What is worrisome, however, is whether lawmakers or ministers will willingly go through the budget page by page, line by line, to eliminate unnecessary projects.

When unveiling his economic team, Obama stressed the importance of swift action by saying, “We do not have a minute to waste in reviving the economy.” The swift and bold U.S. steps are in stark contrast to the slow and indecisive responses by the Korean government and the Bank of Korea.

Seoul`s lackluster and inconsistent responses and parliament’s dereliction of duty will continue to push the Korean economy further into a slump and lead to massive job losses. Both the government and the National Assembly should be more determined than Obama to tighten their belts and not waste a minute.