Economist warns of ‘fiscal death spiral’

Staff Writer | Aug 03, 2019
Author and economist Dawie Roodt says the South African economy is in dire straits and is facing a ‘fiscal death spiral’.

Roodt took to www.politcsweb.co.za to warn that, at current rates of economic growth, the State is coming ever nearer to ‘a fiscal cliff’.

Roodt wrote that the reason why state finances were in ‘such a death-defying spiral’ is that ‘especially since 2009, state spending was increased relentlessly at a time when tax collections collapsed – mostly because of a faltering economy. At this rate of debt increase, it is very clear things will turn out very unhappy, very soon’.

Roodt warned that an economic recovery was unlikely because ‘the ruling elite seems to be hell-bent on doing even more damage to the economy with all sorts of silly socialist ideas, like the suggested creation of yet another state bank, a new mandate for the South African Reserve Bank and the unaffordable NHI’.

The IRR has repeatedly warned that as the government runs out of money it will seek to loot the pension funds and savings of ordinary South Africans. The IRR has also started a mass campaign to stop the government from taking pensions – which will see it apply pressure to political parties, investors, government departments, politicians and pension fund managers to protect the interests of pensioners in South Africa.

 

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