SA facing another downgrade: Roodt

Everybody can see the problem except for those in charge. But they don't care.
Other problem is that with the downgrade, foreign investors will think twice before investing in SA. We need it to assist with growth / job creation / etc.
Population is growing quicker then amount of jobs becoming available. I.e. unemployment is going up.
 
Been saying since last year already that we are in for a rough time.

The underlying fundamentals in our economy has been anything but good, they are actually ***** scary and they have been deteriorating slowly but surely. You can only cover the actual fundamentals up for so long before the market heads where it needs to go.

This next downgrade, should it happen, is going to hit us where it hurts most. Currently there is still some capital inflows but we are bound to see massive outflows should we drop another level as many corporations and the like would no longer be allowed to invest in SA due to the grading.

Just look at whats already happening i.e. Eskom. The world laughed at the fact that the government is standing security for Eskom's loans. Now the government is selling their stake in Vodacom and that money is going directly to Eskom.
 
Paul_S said:
Debt to GDP was sitting at around 28% in 2008/2009.
Now we're at 46%
That doesn't sound like a sustainable policy.

You can't spend more than you earn indefinitely.
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Common misconception. Countries can and should run deficits. Unlike people, governments won't one day retire and need to clear their debts. The expectation is that counties will grow.

Mortymoose said:
Only taxpayers should get to vote!
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Every voter is already a tax payer. Even children pay VAT. VAT is the second biggest contributor to the fiscus, at 26.4& to income tax's 34%.

Numbers from 2012-13 SARS statsf
 
cr@zydude said:
Common misconception. Countries can and should run deficits. Unlike people, governments won't one day retire and need to clear their debts. The expectation is that counties will grow.



Every voter is already a tax payer. Even children pay VAT. VAT is the second biggest contributor to the fiscus, at 26.4& to income tax's 34%.

Numbers from 2012-13 SARS statsf
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Its not a misconception. There is no written rule to say that government HAS to run a deficit. Their are countries i.e. Hong Kong, where they are able to manage thing properly and actually run a surplus.

The principles in regards to a deficit are exactly the same as for a normal individual. Yes you can go into 'overdraft' but it has to be paid at one time or another. Yes, a government don't retire but their debt can get out of hand. A prime example of that is Argentina.

Another factor to consider is what is actually done with the money. If the money borrowed i.e. the deficit, is used for projects that stimulate growth then all should be fine and well as the growth should cover the deficit in time if done right. In SA however most of the money is not applied in such a way resulting in weak growth and that in turn results in the inability to bring that deficit down.

There comes a time where the country will no longer be able to borrow meaning that it has to look at internal sources i.e. the tax payers, for funds to pay back that deficit and or go tits up like Argentina.
 
cr@zydude said:
Common misconception. Countries can and should run deficits. Unlike people, governments won't one day retire and need to clear their debts. The expectation is that counties will grow.[/URL]
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If you can't pay back your debts, very soon no one will lend you money any more.
 
cr@zydude said:
Even children pay VAT.
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Children pay with their parents' or guardians' money so these people pay. Children don't earn money unless it's some teenager with a part time job. Most kids don't really earn money though. And pocket money doesn't count.
 
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