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Sustainable socio-economic efficiency

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Sato
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Chrysalis
Post: #1
Sustainable socio-economic efficiency

By restricting immigration to the educated who complete tests, I had less people needed to employ. Plus a tax on junk products to disincentivize wasteful consumption. To handle deficits and debt, originally I increase taxes on capital as I decreased military subsidy spending; and I decrease pension spending as I increased administration plus decrease taxes on acquisition. The idea was to slow the increase of labor supply and spending, while promoting increased growth and employment.

Eventually I realized not only was my savings decreased then stagnant, but my capital decreased. I halted increased taxes on capital and reversed it with a decrease. As I did that, no further decreases on acquisition, waited to lower it with Laicism reform. Before I didn't do too much when increasing/decreasing, to not rush the results. Seemed too restrained considering inflation of spending and promotion of growth. As I had done previously, elsewhere I decrease pensions, military, subsidies; and increased administration.

The result was a huge increase of growth (and employment) and decrease of deficit (and debt), reversed and increased higher then ever the savings and capital. Previously economy was growing 3-5% (Overview Comparison), then it's 20%.

Having low unemployment with a nominal g.d.p. above my money supply, it seems underemployment is a concern for growth (efficient growth). I decided not to increase money supply artificially by budget, continue letting the bank/market increase it. My hope is to use it as an indicator for what I need to do.

Not sure if it'll work, but I decreased taxes on capital to ease demand on supply (slow economic inflation) and increased education to maximize employment potential (more efficient employment); while continuing to decrease military and subsides spending offsetting changes to deficit, plus increase to administration for infrastructure (static calculation, revenue neutral of less than a billion below). Budget changes were -3% capital, +2% administration, +4% education, -4% defense, -6% subsidies.

Other than the economics, also trying to balance it socially while having as much freedom (life, liberty, pursuit of happiness) as possible for people. Any opinions about my state are welcomed, what would ya'll do differently?

11.10.2017 15:27
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CommieScum
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Post: #2
RE: Sustainable socio-economic efficiency

Restricting immigration merely lowers possible future productive output (FPO), barring cultural and integration concerns. FPO is important because it allows your supply-side to remain strong, maintaining relatively lower prices and high exports, leading a sustainable currency (this is important in this game because trade and currency is extremely simplistic, but I can't blame them since few truly understand it).

Taxes on capital is merely theft upon the most productive individuals of society. Your main source of revenue should be excise taxes, as unlike the other taxes they do not largely affect economic velocity until profuse levels (30%+) or FPO (as excess is easily exported).

You should view high employment with suspicion. In unaltered economies, productive jobs are scarce, and therefore high employment likely either means a labor shortage or an abnormally large amount of unproductive jobs. Communist economies have high employment, likewise, due to literally employing people to mindlessly dig holes (similar to what you may seem in American prisons, which are closely similar to how communist societies operate, symbolically and physically).

Fine options to decrease military (in a single-player game) and subsidies, but I also recommend decreasing family, health, education, and welfare, while increasing justice and administration equal to yearly rGDP growth.

Freedom is fine, but you must find a balance; a state must be able to protect liberties, but a populace must also be equally able to as well.

This post was last modified: 11.10.2017 17:04 by CommieScum.

11.10.2017 17:01
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Sato
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Chrysalis
Post: #3
RE: Sustainable socio-economic efficiency

(Sorry for long post, I need to learn to shorten my thoughts. Don't expect any of you to read all of it. Kopfkratz)

Results of last winter's budget; increased growth, higher net income (bigger increase than cost of living), higher savings and capital. Don't remember unemployment, but its under two percent.

Interest rate continues to decrease, been tracking it plus money supply (yearly each winter). Lower interest rates have correlated with increased output of money supply. So I'm hoping non-artificially it will grow quicker then the economy to match and surpass nominal g.d.p. As I'm not sure at what point it'll have negative consequences.

Only have one task this quarter, top of tasks is bankruptcy; I'm thinking about possibly doing a reform, administration reform. If I did bankruptcy this quarter I'm not sure what to do, either play it safe choosing to provide liquidity to the banks and pay some of debts or letting the banks fail and be restructured. Seems the former would be better short term for the economy, but the latter would help long term (no inefficient banks prompted up; too big to fail). I'll wait until tomorrow to decide which.

I was thinking it's possible to get more productive per person and from automation. A highly innovative technological economy of educated people, to do so with sustainability in mind. Trying to improve the economy more per person with less people, relying less on continued growth while do more with what growth I have and get.

But you're correct more people would equate a potentially larger economy. It seems more difficult to handle unemployment and debt considering social spending. Would require greater expansionary policies to employ people, relying more on increased spending and artificially increasing money supply etc. More economic planning then simply decreasing unemployment by restricting immigration while promoting economic growth, which mostly solves the deficit/debt itself.

Crossing my fingers for eventually higher automation to be substituted in for mass immigration and cheap labor. It'll cheapen labor depended areas of the economy as it does the work of previously more expensive labor. This would increase my unemployment, causing greater competition for work and then I can try to move them to higher employment.

I agree, tends to be how I think as well. But not sure if increasing excise is the best idea now, I don't want further inflating of an inflated economy above money supply. I guess if taxes on acquisition were decreased it could counter with higher savings from less consumption caused by higher prices (hopefully higher investments too). Definitely something I'll think about for this winter's budget.

Inefficient employment is why I'm thinking to something needs to be done about underemployment. If education is promoted and people are incentivize to pursuit higher employment, the problem can be minimized. Easier said then done I'll admit, seems like a great idea to try.

Oddly I try to be realistic about defense spending, probably won't let military under safety go below seventy percent or the lowest sixty to seventy percent. Decreasing subsides was one way to help with the deficit, but I also liked the idea about fairness (no corporate welfare). For this state, it's another reason I haven't consider a major shift from the progressivity of taxation until recently, as I considered the need or benefit. Same for why with a low deficit I didn't further decrease pensions, originally I wanted to both decrease it as a percentage of the budget and slow it's growth (budget inflation).

This state I'm taking more of a democractic approach (Constitutional Democracy, not Constitutional Republic). Not having a budget/deficit problem, I don't want unnecessary and unpopular decreases of spending.

As for education, I need smarter and more skilled workers for higher employment (higher productivity). I think for Family, I do want slower increases in population; but I had decided to wait for certain tasks. For example while I did maternity/paternity for those who have children, plus incentivizing foster care; when it comes to birth limit, I was thinking promoting contraceptions and sterilization to decrease population growth.

Yes I absolutely agree, I've realized balance is the best approach. Especially playing this game, I've learned you must moderate your efforts and more so if it's not aligned with the majority. Let's see if I survive longer this time compared to last.

This post was last modified: 12.10.2017 01:11 by Sato.

12.10.2017 01:04
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CommieScum
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Post: #4
RE: Sustainable socio-economic efficiency

Sato Wrote:
Only have one task this quarter, top of tasks is bankruptcy; I'm thinking about possibly doing a reform, administration reform. If I did bankruptcy this quarter I'm not sure what to do, either play it safe choosing to provide liquidity to the banks and pay some of debts or letting the banks fail and be restructured. Seems the former would be better short term for the economy, but the latter would help long term (no inefficient banks prompted up; too big to fail). I'll wait until tomorrow to decide which.

You should let the banks fail; without government intervention, solid financial systems have typically been able to recover on their own, in spite of the fear mongering.

Sato Wrote:
I was thinking it's possible to get more productive per person and from automation. A highly innovative technological economy of educated people, to do so with sustainability in mind. Trying to improve the economy more per person with less people, relying less on continued growth while do more with what growth I have and get.

Indeed, but the economy in this game is simplistic, and I have determined that automation essentially causes your economy to collapse in the end and have perpetual low growth. There have been several posts describing this exact problem; the game is not built to run for extremely long periods of play.

Sato Wrote:
But you're correct more people would equate a potentially larger economy. It seems more difficult to handle unemployment and debt considering social spending. Would require greater expansionary policies to employ people, relying more on increased spending and artificially increasing money supply etc. More economic planning then simply decreasing unemployment by restricting immigration while promoting economic growth, which mostly solves the deficit/debt itself.

Unemployment is just a number. In the end, your goal should be to increase total productive employment (TPE) not total employment. The influx of immigrants encourages GDP creators to proliferate.

Sato Wrote:
I agree, tends to be how I think as well. But not sure if increasing excise is the best idea now, I don't want further inflating of an inflated economy above money supply. I guess if taxes on acquisition were decreased it could counter with higher savings from less consumption caused by higher prices (hopefully higher investments too). Definitely something I'll think about for this winter's budget.

Excise taxes do not lead to significant inflation. Prices are typically marked up by 100's of percentages. This allows employers ample room to alter prices to affordability, regardless of excise tax. Since mark-ups are near universal, it wouldn't effect small business significantly negatively. The opposite effect happens as a result of high income taxes. Likewise, unlike with high excise taxes, high acquisition taxes lead to total collapse of economy and society. Acquisition taxes are ideally 0, excise taxes ideally meet expenditures required to meet justice and administrative needs. It is also hard for GDP creators to adjust for capital and tariff taxes, and likewise those should ideally zero, with the bulk of your taxes coming from excise.

Sato Wrote:
Oddly I try to be realistic about defense spending, probably won't let military under safety go below seventy percent or the lowest sixty to seventy percent. Decreasing subsides was one way to help with the deficit, but I also liked the idea about fairness (no corporate welfare). For this state, it's another reason I haven't consider a major shift from the progressivity of taxation until recently, as I considered the need or benefit. Same for why with a low deficit I didn't further decrease pensions, originally I wanted to both decrease it as a percentage of the budget and slow it's growth (budget inflation).

Fine, but know that realistically there are some nations that smooch of the United States and spend hardly a dime on military, which allows them to fund exorbitant and inefficient welfare programs.

Sato Wrote:
This state I'm taking more of a democractic approach (Constitutional Democracy, not Constitutional Republic). Not having a budget/deficit problem, I don't want unnecessary and unpopular decreases of spending.

Decreasing spending does not lead to unpopularity. It is mainly decisions that lead to unpopularity. The best chance of you getting deselected is:
A) economy crashes
B) You have too many "very important" decisions undone. For example, I had 5 VI decisions undone, with about 40% voting for me. After I did them, I had 68%. I have been enacting the tax and economic reforms I have been espousing and currently sit with a 14B surplus, with decent popularity (enough to get in two reforms).

Sato Wrote:
As for education, I need smarter and more skilled workers for higher employment (higher productivity). I think for Family, I do want slower increases in population; but I had decided to wait for certain tasks. For example while I did maternity/paternity for those who have children, plus incentivizing foster care; when it comes to birth limit, I was thinking promoting contraceptions and sterilization to decrease population growth.

The skilled workers go to private school regardless. You don't need to be smart to work in a factory; factory children don't pay attention in "free" government school. Regardless, the market would provide private education at an affordable cost for most adults, including poor (assuming working) ones. In my opinion, the "birth limit" decision is poorly designed. There is no option to just let people be and not subsidize; either force or state intervention. I just chose referendum. As for maternity/paternity leave, that is redundant. Fathers are typically the bread winners. Women can negotiate maternity leave benefits with their employers.

This post was last modified: 13.10.2017 02:43 by CommieScum.

13.10.2017 02:34
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Sato
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Chrysalis
Post: #5
RE: Sustainable socio-economic efficiency

Since I had a single task in spring, I did the administration reform. Seems everything continued as before; except higher growth and lower inflation, much lower deficit and slightly higher employment.

Did my tasks for next quarter last night. I wanted to let the banks fail, but after reading about potential effects I decided not. Supposedly it affects savings negatively and causes higher consumption. To avoid unwanted and untended consequences I chose the safe path of guaranteeing liquidity to banks and get them to pay some of their debt. (Other than searching the forum, heres few interesting sites I read; What Was The Glass-Steagall Act, The Case For Letting Banks Fail, Ending "too big to fail": What's the right approach?)

Yes, the game is simplistic compared to real life. Not survived long enough to know myself, but I did read about how the game gets more inaccurate the longer you play (less realistic).

I understand what you're saying economically, as said before I tend to agree. Just haven't found a way favorable in the game for certain states I've tried. So present state I'm trying it differently, less opposed to the government and the majority. But future states I'll continue to experiment, including more hands-off market approach as you suggested.

For excise taxes I think I'll increase them by tasks, wait to see how much before I do so by budget. Other than the big tax on junk, theres one from what I remember on gasoline (plus others). Not sure how low I want to go with capital and acquisition. Considering I want higher investments (more productive) and lower consumption (less wasteful), I'll continue to do so long as the benefits seem worth it.

This post was last modified: 13.10.2017 22:18 by Sato.

13.10.2017 22:17
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CommieScum
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Post: #6
RE: Sustainable socio-economic efficiency

Sato Wrote:
To avoid unwanted and untended consequences I chose the safe path of guaranteeing liquidity to banks and get them to pay some of their debt.


The USA went an analogous path. Historically, certifying liquidity has had the consequence of instigating commercial banks to be less parsimonious with creditor capital, leading a deposits calamity in the 70's. Bottom line is that before regulation, banks had no apprehension with convalescing from a run, as the leaders of the banking sector systematized an effectual response and imposed rules on themselves, not ivory tower bureaucrats or even the unelected tyrants in the federal reserve, of which are habitually incompetent and corrupt.

Sato Wrote:
I understand what you're saying economically, as said before I tend to agree. Just haven't found a way favorable in the game for certain states I've tried. So present state I'm trying it differently, less opposed to the government and the majority. But future states I'll continue to experiment, including more hands-off market approach as you suggested.


I'm glad to see there are still market liberals in the world. In the United States, we are quite a minority, with only about 25 percent of the voting population holding our economic and government principles. I scant see something greater than a self-proclaimed socialist or communist in my area, which can be tremendously disheartening.

Sato Wrote:
For excise taxes I think I'll increase them by tasks, wait to see how much before I do so by budget. Other than the big tax on junk, theres one from what I remember on gasoline (plus others). Not sure how low I want to go with capital and acquisition. Considering I want higher investments (more productive) and lower consumption (less wasteful), I'll continue to do so long as the benefits seem worth it.

A respectable start, but I still strongly encourage moving most taxation onto excise taxes.

18.10.2017 22:13
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