Društvo| Ekonomija

Stone Squeezing

Chris Farmer RSS / 03.10.2012. u 16:37

There are two rules about squeezing blood from a stone. First: it does not work. Second: apply enough pressure and the stone will eventually crumble. Work gloves are recommended.

With the spate of price increases here and there of excises and specific taxes which was landed on our collective heads in Serbia this week - cigarettes, bus tickets, fuel, heating costs, and VAT which affects almost everything else - the government is showing us that they are fresh out of fresh ideas.

Ironically, when the government overspends (as they are doing consistently), the great thinkers in charge of the Brilliant Ideas Department think that they can just off-load this kind of recklessness onto the consumers. Problem solved! Not enough money? More taxes!

Easy peasy.

Sadly, when the CONSUMER overspends, we are left to squeeze the stones. For the most part, in this highly regulated and boisterously bureaucratic society, we are not allowed to overspend. But if the consumer does manage to overspend his budget, he is left out in the cold. He is thrown off the bus. He is threatened with sanctions; he may be jailed; or he may just be beaten up by disgruntled creditors.

Just as a side note, I would like to point out that we live in a Consumer Society. This means, essentially, that the consumer is the driving force behind everything. The things we build and the services we offer are ultimately paid for by the consumer. When he is out of money, then the system should go offline.

But now, rather than coming with innovation and good ideas to fuel the consumer machine (i.e., put more money in the consumers' pockets so they go out and spend and keep the wheels of commerce spinning), we do the opposite. We decide that it is Wise to extract more money from the consumer while expecting him to keep our coveted system turning....


As to raising taxes, let's be honest with ourselves. This will ALWAYS happen. It is the nature of taxes to go up. But I think we should expect a little more bang for our buck. If the prices of bus tickets go up, we should expect better service, not just a bigger congregation of BusPlus inspectors in their branded polo shirts haunting the bus stops.

The VAT hike is the most ironic of all. Bigger Value Added Tax makes everything costlier, but what value has been increased proportionately? It is pure fantasy.

The pressure is building in the boiler. As a consumer, I feel affronted to live in a country where the average earnings do not cover the average consumer grocery bill and then to hear our elected officials (i.e., chosen by the people) tell us that the best way out of the crisis is to make the cash-strapped Serbian public pay for it.

Something is wrong, Prince John. The peasants are revolting.

There are not enough jobs. There is not enough industry. There are not enough foreign investors. There is not enough money. Does anyone REALLY think that the people are hoarding enough dinars in their respective mattresses (bought on credit, by the way) to finance the recovery?

I apologize if this blog has turned into a rant, but I think it is time for people to be angry about all this. The policy of squeezing stones will eventually leave us a pile of gravel.




Komentari (7)

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draft.dodger draft.dodger 16:45 03.10.2012

A Tax on Thingy...

srdjan.pajic srdjan.pajic 17:33 03.10.2012

The policy of squeezing stones will...

That can take quite a while. It's been already proven that one can live of almost nothing, and for very long time. The government knows that very well, because the major players among them were there in nineties, running the experiment, now they just added an "expert". So, they are pretty relaxed...but they'll pay their share, ultimately.
mlekac mlekac 17:47 03.10.2012

Re: The policy of squeezing stones will...

It's been already proven that one can live of almost nothing, and for very long time.

Why do I feel like living proof of this?
Oljacat Oljacat 18:42 03.10.2012

Like it

I like how you put it all together, but unfortunately ... I do not see the end of this, In fact, I see it, but I m afraid it will have some bloody stones
kalifumestokalifa kalifumestokalifa 19:50 03.10.2012


As long as the electorate rewards these types of policies they will continue to enforce them.

People in Serbia are first and foremost divorced from the payroll taxes, because they only get the net wage and are blissfully ignorant of the 70% payroll tax rate even for the minimum wage.

If people were given their gross wage instead of net wage and than required to pay the 70% tax, we would see much more concern about the huuuge bureaucratic apparatus,
about the insane subsidies etc

Weather the VAT rate is 18% or 20% is close to irrelevant.
That the payroll tax even on the minimum wage is 70% is criminal.

rade.radumilo rade.radumilo 22:45 03.10.2012

Re: Electorate

Weather the VAT rate is 18% or 20% is close to irrelevant.
That the payroll tax even on the minimum wage is 70% is criminal.

Furthermore, it's not that the new VAT solely has raised the retail prices. It is the new taxing rates on fuel. Fuel price has gone up by 8% embeding itself (together with 2% VAT increase) in all the prices.
ivan.radak ivan.radak 00:54 04.10.2012

Irrational people

the government is showing us that they are fresh out of fresh ideas

I really hoped for just one fresh idea.

Wife and I went to a supermarket two days ago. I was shocked. More or less with prices. I expected this kind of behaviour from producers.

But, i have never seen so many people before in that supermarket even though i go there regularly. They were in such a hurry to buy everything they need like there will be another VAT hike next week and another one in two weeks and another one in three weeks...

And another thing. If you all remember stories in media just one month ago - don't expect price hike because consumer spending is falling rapidly... Same people, same stories



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