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Old Oct 4, 2014, 6:30 pm
  #14  
evanb
 
Join Date: Dec 2010
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Programs: UA 1K, BA Gold, LH/SN/LX Senator
Posts: 449
Indeed, South Africa did run a surplus in 2007 and 2008, but it wasn't budgeted and was due to higher than expected tax receipts. You are correct that the deficit has ballooned, mostly due to weaker tax receipts rather than excessive growth in expenditure.

Countries can get into debt traps but I don't think we are there yet, or anywhere close. South Africa's debt to GDP ratio has fluctuated between 27% and 50% since the 1960s. It is currently 46%. What will reduce the debt to GDP ratio is GDP growth, not lower expenditure or higher taxes. Economic growth is always the biggest fixer for fiscal policy.

Edit: two years of surplus in the last 55 years is pretty close to perpetual deficits.
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