The marker of the "First 100 Days' of a new presidency traces its origins to Franklin Roosevelt's arrival in the White House in 1933, when the Democratic president followed through on a series of promised measures to urgently reverse the economic policies of his predecessor, the hapless Herbert Hoover. This initial policy sprint would not only help pull the country out of the Great Depression, but would eventually be cemented into the New Deal, a thorough rewriting of the socio-economic contract of the government of the United States with its citizenry.
By all accounts, President Donald Trump is operating with the same haste, hoping to cash in on the supposed political capital that comes with having just been democratically elected. In his first 10 days in office, Trump has signed a series of executive orders to ban immigrants from seven Muslim-majority countries, build a wall on the border with Mexico and implement a blatantly protectionist trade policy. On some level, no one should be surprised: Trump was simply following through on the promises that were the heart of an electoral campaign that got him elected — and no doubt his core supporters are thrilled that the billionaire real estate mogul is turning out to be a man of his word.
But there are millions of supporters not of the diehard variety, who saw Trump as the lesser of two evils, who would take the country more in direction A than direction B. These were the people who were said to take his often shocking campaign "seriously but not literally." Now that we are heading full-speed in Direction X, what will they think? More than his core supporters at home or the throngs of opponents protesting in the streets, it is the reluctant Trump voter who will determine whether these first 100 days are a footnote in history or the beginning of a whole new chapter.
Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.
SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.
The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.
It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.
Seoul housing prices top London and New York
In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.
According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.
Average home loans are equivalent to 270% of annual income.
One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.
According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.
Playing the stock market
At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.
A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."
In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.
42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s
Game of survival
In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.
But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.
This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.
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