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How should I prepare for the following reforms?

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Aspergerian
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Libretania
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How should I prepare for the following reforms?

How should I prepare for the following reforms: Anarcho-syndicalism, Free land, Freigeld, Money Reform I, and Bank Reform I?

I have already implemented Basic Income and plan to create a market socialist economy. The Basic Income reform seems to be working so far, but it was only implemented recently. I have also been increasing my money supply regularly to boost my economy.

This post was last modified: 19.09.2014 00:06 by Aspergerian.

18.09.2014 23:37
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Helsworth
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Post: #2
RE: How should I prepare for the following reforms?

Aspergerian Wrote:
How should I prepare for the following reforms: Anarcho-syndicalism, Free land, Freigeld, Money Reform I, and Bank Reform I?

I have already implemented Basic Income and plan to create a market socialist economy. The Basic Income reform seems to be working so far, but it was only implemented recently. I have also been increasing my money supply regularly to boost my economy.

Hell, man, the difficult part will be to acquire more action points in time; since the cost of reform propaganda increases by 1 point with each use.
Economically-wise and socially-wise, your state is ready for all the above reforms you mentioned. I'd suggest implementing the negative income tax, as well.
Also, you'd like to reduce the nominal interest rate to 1%; and don't allow your fiscal deficit to turn into a surplus (if you want more economic growth and lower interest payments).
All in all, you're ready for the above; the influnce for them is going to be the only problem. Freeland would be my first choice, but make sure you expand the deficit beforehand.
Your state is awesome. Have fun.


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This post was last modified: 19.09.2014 11:45 by Helsworth.

19.09.2014 11:44
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Aspergerian
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Libretania
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Post: #3
RE: How should I prepare for the following reforms?

Got it: increase deficit, minimize interest rate and start with Free land. Thanks.

I currently have 14 AP, so hopefully I will have enough saved to implement every reform that I want over time. My influence has been increasing steadily, so I just might succeed! -- *Eyes light up with hope.*

By the way, should I slow down the money supply increases once Freigeld is implemented? I would imagine that the demurrage from Freigeld would be enough to increase the velocity of money on its own, so further increases to the money supply would generally be unnecessary. But I'm not sure how the game handles Freigeld, so I don't know for sure.

This post was last modified: 20.09.2014 00:40 by Aspergerian.

20.09.2014 00:23
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Helsworth
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Post: #4
RE: How should I prepare for the following reforms?

Freigeld shrinks a good chunck of your capital (capital flight). But usually, it makes exports more competitive because of the currency depreciating. Still, Freigeld alone won't keep the interest rate at 1%, which is the lowest Ars-Regendi allows.
I wouln't really bother with this reform, I'd focus on Egalitarian Transhumanism; but it's your call.
In real life, one wouldn't need Freigeld to keep interest rates low. The government and the CB could simply park the rate at 0%, stop issuing bonds and run deficits without issuing debt (the later being part of monetary policy).


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20.09.2014 09:38
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Aspergerian
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Libretania
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Post: #5
RE: How should I prepare for the following reforms?

I suppose it is unnecessary. Very well, Egalitarian Transhumanism it is!

As for real life, I'd never want to keep interest rates too low during good economic times. It would make it difficult to lower them enough during recessions to restore the economy quickly. The interest rate would lose its value as an economic stabilizer. I'd like to have as many stabilization tools available as possible.

This post was last modified: 21.09.2014 01:19 by Aspergerian.

21.09.2014 01:16
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Helsworth
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Post: #6
RE: How should I prepare for the following reforms?

Aspergerian Wrote:
I suppose it is unnecessary. Very well, Egalitarian Transhumanism it is!

As for real life, I'd never want to keep interest rates too low during good economic times. It would make it difficult to lower them enough during recessions to restore the economy quickly. The interest rate would lose its value as an economic stabilizer. I'd like to have as many stabilization tools available as possible.

In real life, monetary policy is a blunt instrument. Interest rates don't prevent booms or busts, nor can they correct things in the market. You'll need fiscal policy for that.
The only economic stabilizers set in place are the automatic fiscal stabilizers.
During the upward cycle, as economic activity increases, government transfer payments go down (fewer unemployed people) and tax revenue goes up.
During the downward cycle, as economic activity decreases, government transfer goes up, and tax revenue goes down. It's the system trying to correct itself.
Thank labor for welfare...

Capitalism runs on sales: I can't produce and hire people if I can't sell, and I can't sell if people can't buy. Aggregate demand is what drives production. Aggregate demand is income plus the change in private debt. People contracting loans increase aggregate demand - which leads to more consumption, more sales, more jobs, more production. But when those private debt levels get too high and debt payments start kicking in, households lower their consumption in order to meet bank payments and also save a little on the side if they're lucky. That has a negative impact on sales and consequently on employment and output levels.
Private debt deflation CANNOT be combated via monetary stimulus; because, people looking to deleverage won't contract extra debt - not matter how attractive the interest rate is. Japan wasted more than a decade on QE; when it could have shortened that painful deleveraging phase by many years if it would simply have increased the fiscal deficit.

The same is true for the UK, for Europe, and for the US.

On a side note, the "natural" interest of fiat money is 0. A positive rate is a subsidy. A negative rate is a tax.


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This post was last modified: 21.09.2014 11:55 by Helsworth.

21.09.2014 11:44
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