Some steps towards creating a Middle Class in South Africa. Firstly, how will we define Middle Class? Roughly, lets say that such people can afford to pay for a bond on a house that is suitable for a family to live in, of lets say a couple with two kids. Maybe that is not the average amount of children South Africans typically have but humour me. The rule for the government should be that anyone who cannot reasonably afford to own their own house should not pay tax of any kind. What does that mean for the average South African poor class (b/c most South Africans are poor)? It means they will have a few extra Rands in their pockets and will be able to buy more stuff or save more, hence creating a bigger circulation of wealth, thereby gradually improving the living conditions of the people, business in general, and an increase in wealth, i.e the creation of a Middle Class. Further, banks should drop the interest rate to the bare minimum (b/c we know they need interest because they are basically criminals?) to reduce the repayments on loans, and therefore assume greater risk and not put most of the risk on the borrower. This will mean that those who want to make loans will more likely be able to afford it (as the criteria would get stricter), which contrary to what most people think, is a very good thing. Why? B/c demand and supply will meet at a lower equilibrium as less people will be able to fetch goods at a high price (due to the inaccessibility of loans) and hence the seller will have to make less profit on each sale, but will be able to sell more (because his accessibility to finance would also mean that his repayments are less, the bank still earns interest, but does have to take significantly more risk, which is great! Further, because the lay person has greater right to his own income, minus the petrol tax, the Sales Tax, the road tax, the toll gates etc.., and the income tax he has more money to spend and hence the money circulates faster and more small businesses spring up all over the show that can once again survive. Lastly, multi national global companies should be legally limited within the scope of our economy, as in the long run they are actually less profitable, they exploit our labor, and they do not really invest in our country as much as we believe, rather they hoard their wealth, which is one of the greater evils next to usury because it is a waste of resources for men to have what they cannot use!
Posted on: Fri, 31 Jan 2014 09:25:16 +0000
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