Public attention is drawn to an alarming increase in debt again, this time by lawmakers inspecting government agencies, state-invested corporations and state-funded organizations. Chastised for its failure to put debt in check, the administration has committed itself to curbing spending to balance the national budget by 2013.

It is not the government alone whose debt has soared. It is the same with two other main economic players ― business enterprises and households. The financial liabilities of the three stood at 3,283 trillion won as of the end of June 2011, up 36.7 percent from four years ago. This should not pose a serious problem if the debt-servicing capacity of the three economic players had grown at a comparable rate. But it did not.

The capacity, as measured by the ratio of financial assets to financial liabilities, dropped from 1.52 to 1.46 during the cited period. The private business sector’s debt may not be much cause for concern to the government. Most worrisome is the debt-servicing capacity of state-invested corporations, which stood at 0.51. The government is spending 10 trillion won to 30 trillion won each year to make up for their losses.

What may be beyond the comprehension of ordinary taxpayers is that 27 state-invested corporations, while taking such subsidies from the government, paid more than 1.34 trillion won in bonuses to their executives and employees last year. But they cannot be solely held accountable for their snowballing debt, given that they borrowed heavily to launch big-ticket public works projects on behalf of the government.

Their borrowing is not included in national debt, which makes the government look more fiscally sound that it actually is. Should a state-invested corporation become insolvent, it is the government that is required to take over its debt obligations.

As such, they are little different from national debt. Also among the categories of de facto national debt are the government’s debt guarantees, the shortfall of the premium reserves for four loss-riddled public pension programs and outstanding monetary stabilization bonds.

The amount of national debt directly owed by the government was at 392.2 trillion won at the end of last year. Its ratio to gross domestic product, 33.4 percent, was much lower than the OECD average of 97.6 percent last year. When de facto national debt was included, however, the total amount increased almost fivefold.

Based on a report from the Bank of Korea, Rep. Lee Han-koo of the ruling Grand National Party says, the total sum of national and de facto national debt was estimated at 1,848.4 trillion won at the end of the first half of this year. He is right to say that the nation is exposed to a greater risk of fiscal crisis than the relatively low ratio of national debt to GDP may imply.

As he says, it is not just national debt alone but de facto national debt that the administration needs to get under control. It is a matter of course that special attention should be given to an increase in debt incurred by state-invested corporations, which more than doubled during the four years from 2006 ― from 134.27 trillion won to 271.75 trillion won.

Accountable for 80 percent of the debt were the top five state-invested corporations in terms of assets ― LH Corp., Korea Electric Power Corp., Korea Expressway Corp. Korea Hydro & Nuclear Power Co. and Korea Gas Corp. In the case of LH Corp., the public land developer and homebuilder, the debt ballooned from 50.43 trillion won to 125.47 trillion won.

The administration says it is committed to balancing the budget by 2013 ― one year ahead of its original schedule. But what good is a balanced budget if a fiscal deficit is hidden in the form of borrowing by state-invested corporations?

A case in point is Korea Water Resources Corp. whose debt increased from 1.74 trillion won at the end of 2006 to 7.96 trillion won four years later. Its debt skyrocketed as it borrowed to help finance President Lee Myung-bak’s four-river restoration project.

No such accounting sleight of hand must be permitted when the administration is trying to balance the budget.