What would happen if ?

[asylum]

Instead of raising interest rates so that we spend less why not make a law whereby when a interest rate increase is on the cards all employers take the amount of said interest rate hike from employees and deposit that into some sort of bank account.

[#2]

How does the government win in this scenario?

[SimonPB]

talk about red tape? why not just pass a law banning spending on certain days or hours?

[Preston]

FNB tried this , but our Court banned the Zillion rand a month competition. Red tape i say?

[#5]

It's called load shedding

[asylum]

and why not we are already being told when we can have power and are going to get punished if we use to much, so ja anything goes here.

[DCTrader]

How spending isn't based on our salaries. Let's say I own a bonded house worth R2m but my salary is only R20k pm gross (don't ask how the bond was approved ;))... and some other guy has a bonded house of R1m with the same salary... then how would you regulate how much to withhold off each salary given that our monthly spending would differ?

[Preston]

I blame Simon Brown. He is not educating us..LOL

[asylum]

well DC thats the same when you have a 1% interest hike you pay more on your R 2 million house than the guy who owns the R 1 million house irrespective of what your salary is so i dont understand your question.

[JohnnyCash]

I dont understand this thread.....

[DCTrader]

Ok... misunderstood your initial post. I assumed the employer would withhold a set %. So you saying each employer must calculate what the total spending effect would be on each of his employers for a given increase in rates... quite a bit of admin wouldn't you think? And what employee would disclose all his expenses? ;)

[asylum]

well did not give this a lot of thought was just something that came up, basically if you save more and spend less, less need for interest rates hike to curb inflation.

[#13]

Which is exactly what the interest rate hike is there to stimulate asylum.

[asylum]

yes Roman i know that, was just wondering if there was another more parctical way of addressing inflation.or are interest rates the only way, how did we manage before interst rates were brought about.

[saash]

The same net effect, with much less admin, and no way to jippo the system. When rates were decreased, people were strongly urged to use the opportunity to settle debt. Who listened? People went on a shopping spree, re-furnished their homes, did add-ons and alterations. Bought newer, more expensive homes. People "re-bonded" and took advantage of "second bonds". Nothing got saved - now there is a price to pay. People can't say that they were not warned about the effects of over-spending.

[saash]

There is a better solution - its called a Credit Act. But people don't like that one either. Another solution is debt councelling, which has been brought in with the Credit Act - and it seems that the banks and the retail outlets are having a mighty tough time getting to grips with actually putting these things to work the way it was meant. The answer is to stop people from over-spending when rates are cut. Education is also a good answer to the problem, like introduce basic economics into "Life" (or whatever its called) at school. The rates increase is what results when people over-spend. Spending drives inflation. "the people" need to get to grips with this.

[#17]

Tell you what, lets all eat bread and marmite for a month, and walk everywhere. see if this drops food/oil prices and inflation.

[asylum]

yeah but marmite price will go through the roof.lol

[saash]

Well, if we don't do so willingly, Tito will enforce it by taking away your spending money.