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my economy has been stagnating for around 2 years now. i have had to go through a number of interest rates rises in order to control inflation which at one point reached 5%. in my attempts to secure price stability my economy has stagnated. my buget deficit has expanded and i announced a tough deficit reduction programme to correct this.
i predict my national debt to rise above 1 trillion euros before coming back below that.
im in a dilemma whether to slash rates and ignore the price stability i have worked so hard to get.
advice please!
From your name i guess you are conservative and think that slashing the budget is the wayto go . That is not correct . Think about this the way i do : when you slash the budget there is less jobs which leads to less tax and less budget which throughs you in to a loop of having to slash even more budgetand recieve even less tax . The correct way to make sure your prices stay the same is dont print money and the correct way to make sure your economy is expanding is to have export higher than import which means that your country reseaves more money from abroad than it spends buying from offshore .P.S.increse your taxes especially the one for profits from investing money .
IMHO:

1. Reduce your income (acquisition-taxes) by the maximum allowable rate. If you’re able to make changes of around 1/5th in your budgets, this would allow for a reduction in your income tax from 15% to 12%, thus stimulating your economy.

2. Reduce your capital / savings tax by the maximum allowable rate. This will stimulate business spending, stock capitalizations and personal savings.

3. Your Pension-Benefits are too generous. Your living-costs are averaging €1,118 per month. Meanwhile, you’re providing pensioners with an income of €2,232 per month. Your nation’s pensioners are more prosperous than your working-classes. A 1/5th reduction in your pension-benefits would save €100-billion, which is more than enough to cover the tax-cutting program that I’m advocating. You should continue reducing those benefits until your pension-benefits are correlated with your living-costs. This move would reduce your fiscal-deficits and national-indebtedness.

4. Reduce your welfare-benefits and institute the Labor Reform. Your nation’s welfare-benefits are too high relative to the nation’s living-costs. You’re providing a financial-incentive for your people to cease working and to begin collecting welfare. That is the reason why your jobless-rate is over 12%.

5. I wouldn’t be too concerned with price-inflation in the short-term. You should reduce your interest-rates from 8% to around 6% in the short-term. However, you should leave your MS unchanged in your budgets.

6. Increase your Family-Benefits. Your population is declining by around 25 basis points per annum. This isn’t sustainable, as your population is shrinking and aging. This trend isn’t favorable for maintaining your generous old-age pension program, a program that relies on a workforce that is growing.

7. Reduce your Custom-Duties by the maximum allowable rate, as this will allow you to continue combating price-inflation without starving your economy. Free trade and competition will allow you to maintain relative price-stability. As it’ll increase your international rating, it can even benefit your manufacturers and exporters.

RichardAWilson Wrote:
IMHO:

1. Reduce your income (acquisition-taxes) by the maximum allowable rate. If you’re able to make changes of around 1/5th in your budgets, this would allow for a reduction in your income tax from 15% to 12%, thus stimulating your economy.

2. Reduce your capital / savings tax by the maximum allowable rate. This will stimulate business spending, stock capitalizations and personal savings.

3. Your Pension-Benefits are too generous. Your living-costs are averaging €1,118 per month. Meanwhile, you’re providing pensioners with an income of €2,232 per month. Your nation’s pensioners are more prosperous than your working-classes. A 1/5th reduction in your pension-benefits would save €100-billion, which is more than enough to cover the tax-cutting program that I’m advocating. You should continue reducing those benefits until your pension-benefits are correlated with your living-costs. This move would reduce your fiscal-deficits and national-indebtedness.

4. Reduce your welfare-benefits and institute the Labor Reform. Your nation’s welfare-benefits are too high relative to the nation’s living-costs. You’re providing a financial-incentive for your people to cease working and to begin collecting welfare. That is the reason why your jobless-rate is over 12%.

5. I wouldn’t be too concerned with price-inflation in the short-term. You should reduce your interest-rates from 8% to around 6% in the short-term. However, you should leave your MS unchanged in your budgets.

6. Increase your Family-Benefits. Your population is declining by around 25 basis points per annum. This isn’t sustainable, as your population is shrinking and aging. This trend isn’t favorable for maintaining your generous old-age pension program, a program that relies on a workforce that is growing.

7. Reduce your Custom-Duties by the maximum allowable rate, as this will allow you to continue combating price-inflation without starving your economy. Free trade and competition will allow you to maintain relative price-stability. As it’ll increase your international rating, it can even benefit your manufacturers and exporters.

Nice tips that you have made.I think at this point of time all the economy of the world is stagnant and it is because of the so called war on terror.

stagnation pressure is the static pressure at a stagnation point in a fluid flow.At a stagnation point the fluid velocity is zero and all kinetic energy has been converted into pressure energy (isentropically). Stagnation pressure is equal to the sum of the free-stream dynamic pressure and free-stream static pressurea state of inactivity "economic growth of less than 1% per year is considered to be economic stagnation.A period of little or no growth in the economy. Economic growth of less than 2-3% is considered stagnation. Sometimes used to describe low trading volume or inactive trading in securities.
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