Public Uproar Over Government Debt Relief: "Why Should We Pay for Others' Debts?" vs. "It's a Social Debt"

As the government has introduced a debt-adjustment policy to relieve small business owners who accumulated debt during the COVID-19 pandemic, fierce social controversy has erupted over the measure.

Opinions are clashing between those who argue that "money that was borrowed must be paid back" and those who contend that "the country must help because this is a debt created by society."

[Citizen: The sentiment changes from when you enter the restroom to when you leave. Getting loans at low rates during COVID-19 was actually a benefit for them. Since they received a fair amount of benefits, they should pay back what they have to pay back.]

[Self-employed business owner: (During COVID-19), not only were business restrictions imposed, but gatherings were also banned. (The government) only told us not to do things, while self-employed individuals took all the actual hits. I think the expression debt "relief" is also wrong. The government should just provide support and wipe it clean.]

Amid sharply divided opinions across various sectors, supporters and opponents of the government policy met on SBS News Hunters to engage in a heated debate.

[Jeong Yeon-hee / Chairperson, Korea Supermarket Cooperative Federation: Struggling self-employed individuals held on at that time just to survive, never imagining that once COVID-19 passed, high interest rates would hit us. The expectations and hopes they held were struck once again by a combined shock of high inflation and high interest rates due to various wars. They are enduring and carrying that cost as debt right now, and to say, "Ah, you incurred this personally"—no, that is not true. Because this is not a debt incurred by individuals, but a loan created by society, the state and society should share a certain degree of responsibility, which is what we are saying.]

[Huh Joon-young / Professor of Economics, Sogang University: I think it is necessary to take COVID-19 into consideration. During COVID-19, business hour and gathering restrictions were imposed due to quarantine measures, so I acknowledge that it was a force majeure situation, different from regular business failures. However, out of about 360 trillion won in loans extended to sole proprietors at the time, about 160 trillion won has still not been repaid. That means—even if debt relief is carried out this time, those people are not going to stop running businesses in the future, right? This kind of thing will continue to repeat. Therefore, I tend to oppose the government repeatedly pouring water into a bottomless pit.]

Regarding the debt relief policy, fairness controversies previously emerged with criticisms asking, "What about those who diligently repaid their debts?", and the small business representative offered the opinion that preferential policies could be implemented for those who repaid well.

[Jeong Yeon-hee / Chairperson, Korea Supermarket Cooperative Federation: For those who repaid well, before I came here, I looked up the operating profits of financial holding companies and the top five commercial banks over the past five years, and they amounted to about 190 trillion won. That ultimately means they saw operating profits of around 200 trillion won. These entities made profits from loan-deposit margins amid high interest rates. So, we can just find ways to lower interest rates a bit more for these sincere repayers. Rather than pushing these people away and saying, "Bad, you took on debt, so no," we should say, "You repaid well, so we will give you more preferential treatment," while helping those who couldn't repay and fell into such difficulties just this once.]

To the question of whether it is possible to distinguish whether the debts incurred by small business owners during the COVID-19 pandemic were genuinely for business operations or if they were used for personal investments and the like, the two individuals also presented differing views.

[Huh Joon-young / Professor of Economics, Sogang University: I think it is very difficult to distinguish. In particular, one of the characteristics of self-employed individuals is that business debts and personal assets are not easily separated. Because this is harder to separate than for wage earners, I think the government would say this is a very difficult part for them, from their perspective.]

[Jeong Yeon-hee / Chairperson, Korea Supermarket Cooperative Federation: I think it is possible. Look at how much better systems have gotten nowadays. Furthermore, for self-employed individuals, recently over 95% of card sales are processed digitally, so they can be sufficiently separated.]

Experts observing this advised that it is a critical time for fair and transparent financial policies that everyone can accept, ensuring that our society's basic trust—that "borrowed money naturally ought to be repaid"—does not collapse.

Netizens who came across the stories also shared reactions such as, "It makes me regret taking on debt and paying it back slowly," alongside sympathetic responses saying, "This is an essential policy in order to survive."

(Planning: Yoon Sung-sik | Video Editing: Lee Da-in | Video Source: News Hunters | Produced by SBS Digital News)

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