South Africans have an in-built distrust and disdain for the government but there will always be a cohort of morons who are willing to support it and think that democracy is the only way of governance even if it failed us dismally. Insanity is about repeating the same thing over and over and expecting a different result, and boy is many South Africans cooked in the head and should be institutionalized and not liable to vote.
Democracy is about mob rule and as long as you keep throwing the mob a few crumbs they feel they can't get for themselves the status quo will remain. So how do you keep giving out a free lunch now and then to keep people in line?
Well through the money printer of course.
Aim the blame at the right people
A lot of criticism gets thrown SARBs way for the current inflation and for good reason, people are suffering and it is the central bank's mandate to keep inflation in a certain range. Out of all SOE's I think SARB is probably the best run of them all, not saying much but it's the cleanest shit-stained underpants in the hamper.
And while central banks do create base money, I think not enough attention is focused on government spending who is more than often the reason for the monetary expansion.
Fiscal policy has been a major driver of the high inflation we have observed over the past couple of years. Our government has a spending problem and cannot
Like farm workers on the dopstelsel, they stumble back to work just to get another hit but never address the true problem. The South African government has run a budget deficit nearly every year since the since the 90s. The last time we ran a budget surplus was in 2007/08 when Mbeki was in office.
Image source: - tradingeconomics.com
Spending isn't all bad
It’s important to note that spending in and of itself isn’t a terrible thing…as long as the money is allocated into wise investments and infrastructure that provide a return on investment and benefit society.
The problem is that the government’s track record as a capital allocator is atrocious. Most of the money spent today goes to existing entitlements or is wasted on unproductive projects. All this government spending does is waste taxpayer money, devalue the dollar, and stoke inflation.
Governments don’t seem to understand that it is their spendthrift nature is the exact contributor to the inflation South Africans are currently struggling with today.
Central planned economies always fail
Each year governments will continue to use the money printer to cover up larger and larger cracks and with that comes more misallocation of capital, more perverse incentives which lead to capital destruction until the whole thing falls over.
These processes can take years because citizens are so tethered to their masters, that they want to get clobbered over the head by inflation. It takes a lot of abuse before a populous finally loses faith in the currency.
Despite figures that should alarm people, the population will continue to live in their delusions that assets go up forever and it's all relative to the cost of living.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, "I am a Jessie."
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