Economic Depression – the power of a metaphor

Are we not losing the plot, the meta-narrative in which a story of market folly is allowed to amplify itself via the InternetĀ  in an interconnected world, thus driving more foreclosures, as investors lose confidence in the system? How much of what we see, is the result of computer technology, virtualisation and the ephemeral? Yes the West is in crisis, and the US banking fiasco has not been averted as bad debt is offloaded onto markets around the world.

Computers have the ability to telescope the most trivial of data, until what you know, the mole-hill is a mountain, and the mountain is the biggest mountain in the world — it would seem there is no escape from decisions made in the virtual world — objects in the rear-view mirror may appear closer than they seem?

BIG: We want wealth redistribution now, not poverty alleviation sometime in the future!

OPPOSITION to a basic income grant (BIG) falls into two categories — there are the free marketeers who preach an extreme form of market fascism in which economic losers need to be punished in order for the system to sustain itself, along with the exploitation of labour for profit, and for whom welfare is anathema (since it would mean relief from the punishment “incentive” and dilution of the motive forces behind capitalist competition), then there are the market liberals like Sean Archer (Cape Times Oct 24) who puzzle themselves with theories that merely restate the problem of poverty in terms of pseudo-scientific empiricism.

How much will poverty alleviation cost? How many poor are there in South Africa, and how can we distinguish between the poorest of the poor and the not-so-poor? Questions like these trouble the minds of liberals who have never experienced poverty, or who fear that tackling this issue will erode their status and position in society, effectively overturning the apple-cart as it were. The definition of what it means to be poor, as Archer intimates, must inevitably be rewritten by a form of redistribution that tackles the harshest of economic cruelties and depredations.

WELFARE STATE: Give VAT back to those who deserve it most.

WE’RE not asking for bread, although this used to be a rallying cry for the poor, the world over. We’re not asking for government subsidies on milk, or delivery of food parcels to those in need. No, all we are asking for is for our VAT BACK!

Giving VAT BACK to the poor, will alleviate pressure on other social services while enabling us to take control of our lives. VAT is an example of the most direct form of taxation, yet for those who spend all their income on food, clothing and shelter, VAT is just another example of big government and its hidden hand in our pockets, what economists euphemistically call “indirect taxation”.

How much tax actually reaches the poor when we are most in need? The answer is nothing or very little. More often than not, our pennys are handed over to the state to be spent on big budget items, such as military frigates, luxury airliners for presidents, and state banquets for foreign politicians.

By demanding VAT BACK — welfare in the form of a tax rebate, a leg-up rather than a hand-down — citizens are merely asking for what is rightfully theirs: How can you be 100% sure that you will never be left without a job? Homeless or without food on the table? Desperate or in need of assistance? Often dire straits coincide with other unexpected problems in life: A death in the family, a new-born child, a situation out of ones control, even marriage, separation or divorce.

Currently the only citizens to receive any welfare grants are those who qualify for assistance as a result of old-age, mental or physical disability, and children up until age 14. Which means that unless you are aged, infirm, or the legal guardian of a child, you could be left walking the street at night, seeking shelter, begging for aid, coerced into red-light employment or worse.

THE SIMPLE SOLUTION: DEMAND YOUR VAT BACK!

DEMAND your VAT back. Believe it or not, the average South African will hand over the government *R33 600 spent entirely on food and given to the exchequer in the form of VAT. This is money out of your own pocket! What do we get in return for that expense? Very little. A parliament that does nothing but pass laws. A judiciary that does nothing except complicate the law-making process, and a president who spends most of the time outside of the country, fixing other country’s problems.

Where is the government when you suffer from unemployment? Who is their to look after you when you are ill? State Hospitals in spite of their elegant sounding names, do very little and still expect you to pay for services at the end of the day. Receiving your VAT BACK could be the start to a new life. Just imagine what the money could do. Suppose for argument sake that you considered VAT not as a tax paid over to the state but as an interest-free loan given to the fiscus on the understanding that it would eventually be given back, a loan instead of the forced hand-out to big government, red-tape and bureacracy that it really is.

Over the years your stake in the South African fiscus and the economy would be enormous, pure capital given away at zero percent and used to loan out to banks and other institutions at 8%. So why not ask for your VAT BACK now? Supposing a 30 year old male went on welfare payments today, “the dole” would take thirty years of paying back R500 a month directly into his account to pay off the initial “loan” granted to the fiscus, a loan given without much thought, just via the extraction of value-added capital through the course of ones lifetime.

HOW MUCH IS YOUR PERSONAL CONTRIBUTION TO SOCIAL WELFARE REALLY WORTH?

A FIFTY year old female citizen put on the dole today would never hope to receive all her money back, private money given to the fiscus through the course of ones lifetime, considered as a loan, and would probably die before reaching the ripe old age of 100.

Whichever way one looks at the figures, even if one reduces the amount spent, say on consumption for the first ten years of life, *see figures below, the Welfare State is affordible not only in principle but in reality. Of course R500 is only an estimate — some people spend less others more. There’s also clothing and shelter to consider. The repayment of VAT spent on food alone over the course of ones lifetime does not half compensate you for the initial loans made to big government.

Ask yourself the question: how much is my personal contribution to the state’s coffers worth, ie. what would social welfare cost not just through direct income tax but via indirect taxation of goods and services ie VAT?

An impossible problem since one is always taxed, even if you receive a welfare cheque, that cheque gets taxed the minute you spend it.

South Africans are one of the most taxed nations on this planet yet receive very little in the form of social support. Think about the needy, isn’t it time we eliminated some of the worst forms of poverty such as begging? Or restored peoples dignity with the knowledge that each and every citizen is looked after, without race and class distinction, all taken care of without exception?

By demanding a direct payment of welfare in your hour of need, you will not only destroy the lie that you don’t deserve such a payment, but the illusion that this kind of money does not exist. Call your MEC, phone your political party, campaign for a welfare state that meets the needs of all its people.

(* a simple guess-timate based upon an average life expectancy of 40 years, x est R6000 pa spent on food, ie R500 per month = R240 000 spent in total, that includes a startling R33 600 or 14 % VAT handed over to government in the form of indirect taxation.)

WHY DIDN’T I THINK OF THAT?
For more proposals for a better future, send a R100 cheque or money order and a self-addressed envelope to:

D R LEWIS
(Engineer of the Imagination)
PO Box 4398,
Cape Town 8000
South Africa

Or for a short pamphlet on overcoming the master-slave-worker state, R50 cheque or money order to the same address.