Taxation versus Borrowing

[Desertfox]

We are not trying to make a perfect world here, and if the OTL world is doing it so much better reason to introduce it.

After the 4th or 5th penalty the player will move on by himself seeing as his economy will be completely shot and he won't be able to do anything. Think of it as a 3 strikes system, abuse it once 70%, twice 50%, three times 35%. Its not lenient at all, but allows one time offenders to get a second chance. Just look at the US, how many chance have we got...

[Tanthalas]

My whole issue is the more shit we add the more complicated the bookeaping gets.  im in favor of anything that reduces the ammount of numbers I have to crunch.

[Desertfox]

This would be optional, use it if you want to, if not don't even worry about it.

[TexanCowboy]

Yo.

Carth, if you want to talk about politics, please do it in private, k?

[Carthaginian]

Yo.

Carth, if you want to talk about politics, please do it in private, k?

Not talking about politics- I'm just pointing out real world examples, Tex. Every major nation that follows the practice of deficit spending has either a rapidly growing debt... and many are right now experiencing political upheaval on a scale only seen before in tiny nations with no real economy and run by tin-plated dictators with delusions of godhood.

Even 'stable' and 'powerful' economies like the US, Japan, Great Britain, the EU and Canada are experiencing these kinds of troubles now- all as a result of something that is now being debated about being allowed in our game.

Deficit spending breeds more deficit spending as you borrow money to pay off the deficit.
It's just a fact of economics- and human nature- that once you break your budget, it is extremely difficult to come back within it..

[Tanthalas]

No DF if the other nations that are hostile to yours are doing it,it isnt optional they defacto force you into doing it to remain viable.  Thus forcing Aditional paperwork on other people.  I will flatly say I am against this proposal, I will be against this proposal in any shape or form that dosnt have drastic repercutions for any nation taking it.  Just as I havnt even broached several things that I know are OTL Mormon Standard for Deseret because im sure that the mods would say no.

[ctwaterman]

*sighs*.....

This is getting a we bit frustrating.....   I could have sworn one of the major problems in the last game was not being able to save up unspent money from your economy.   Without the ability to build a slush fund or do what most nations did which was to bank surplus money well we dont really have any realistic way to simulate an economy.

I think if you look at the US Government Prior to World War I and World War II the US used to run at a profit.  The profits were banked.

So before any MORE players blow a gasket..

The Proposal was to allow players to build up a percentage of their GDP in their own banks.  Loaning that money to other Players or NPC well I dont think we as Moderators had gotten further then well its logical but do we want to allow it.  Let alone what percentage of the GDP do we want to allow.

So please everyone take a chill pill discuss things like rational people.

[Logi]

-snip-

The problem with deficit spending, that can be solidly proven, is not so much that it is a guaranteed fail, but the fact that the money is drawn out for a temporary fix and then never goes away. For example, social security was originally conceived in the US as a temporary means of helping people who did not know how to save, save for retirement. There was an opt-out option (no tax from SS if so). Eventually it became mandatory and expanded. Usually the deficit spending came from welfare programs that never went away.

Of course, in hindsight it seems insane, but it is quite logical. Even in today's problem, most people still do not want their over-bloated welfare programs taken away. Therefore it was simply bad politics to make such unpopular decisions (no one would support your position).

The problems of the US are no quite as severe as everyone makes it out to be. The debt-to-GDP is actually relatively small and with 2 trillion in tax revenue, we could easily pay it off. Problem is no one wants to make the sacrifices necessary to. Now the "stable" economies of Japan and the EU are another matter. Japan has long had a stagnate economy with over 200% debt-to-GDP ratio, it's rating should really be lower than B IMO. EU was just a fundamentally flawed concept, the consumer nature and government positions are too varied for such a weak Union to hold them together for a "strong" economy.

--

It's quite logical to borrow from other nations (or the national bank itself) during times of distress, so I do support both loaning between players and withdrawing savings in banks. My line of reasoning is that, that extra bit of money may make the different between victory or defeat in a war. In total war, it is the different between having a nation to pay back loans and not having a nation at all. It is reasonable, provided that the player returns the money.

Of course, we could "rate" players on their ability to return money (something like an N-verse S&P) or an inflationary drop in economy productiveness (ie: the currency is devalued and thus so is all products etc.). I think the former seems like a decent idea and the latter might be too much bookkeeping.

[Carthaginian]

Logi,

THANK YOU.
You have just made the most excellent case for why this is a BAD IDEA. :) Nothing ever works like it is intended- and borrowing money is exactly one of those things. If we allow deficit spending, it will happen just like you detail- things that we never intend shall come about from the innocent notion of allowing a nation to borrow from itself or others.
Just like with Social Security, a very benign thing at its inception, allowing deficit spending in N-verse is likely to develop into the nightmare which you suggest- developing bond rating, a credit index... bogging down a nice, relaxing sim in the idiocy of international banking.

You are very convincing with your description of this nightmare...
I like the idea of having such things allowed even less than before you you typed that.

[Desertfox]

All I'm talking about is pretty simple. This is not a full scale economics sim...

Say Nation A is at war and is unable to secure a loan from any other nation. The nation pulls out a $20 loan from itself, terms are it has to be re-payed at $25 in three years. If said nation is unable to repay in said time it suffers a punishment in line with its loan, if a small loan then say a 5% permanent loss of GDP.

As an example of why this would be useful: In WW I had Mexico sells certain stuff to another country. I then went ahead and made my budget with the new income which was significant. However, said country canceled its purchase very very late. At that point I had made several other deals with other countries that I could not cancel. I was going to have the money later on but I did not have it at that specific point in time. I had to resort to getting a loan from another country using a couple of my ships as collateral. This almost led to war when the other country came close to not returning said ships after I repayed the loan. At that time such a system like this would have been very helpful.

[Tanthalas]

I am simply against anyone being able to loan money to themselves... to much potential for Abuse.

1880 Nation A is $20.00 short so the borrow it from themselves
1881 Nation A Borrows $8.33 from itself and banks it
1882 Nation A Borrows $8.33 from itself and banks it
1883 Nation A Borrows $8.34 From itself and pays off the original loan ammount
1884 Nation A pays off loan 1881 $10.00
1885 Nation A pays off loan 1882 $10.00
1886 Nation A pays off loan 1883 $10.00
1887 start the Cycle over again

Atmitedly it would be a pain in the ass, but you never get hit with the big balloon payment doing it like this.  You could even make it more complex by borowing the money to pay off the smaller loan ammounts.  Now in and of itself there isnt realy a problem with this, im just concernd with what happens when a player gets ate by IRL and someone else who dosnt have all the financial data takes up the nation.

None of which takes into account some of the realy freaky things players can do.  Take for Example Deseret, Heavily Mormon each member of the church is expected to pay 10% of their income to the church in tithing.   However in this case the church just happens to be the Goverment.  so Hypotheticly I could set my tax rate at 0% and still have more income than any other player, note I dont intend to even ask about actualy doing this its just an example (well unless the mods tell me I can do it without trashing my economic growth  ;) but im realy not asking)

[Nobody]

Tanthalas, I don't see were you see a problem.
When I asked (quite worried) if we (again) would have to perfectly balance our income and expenditure (coupled with only rough tax steps) I was told that this will not be a problem. In favor of KISS we would be allowed to carry over a couple percent of our GNP from one year/report to the next. I think it would be only consequent if that could be both a positive or negative value. If it's positive nothing happens, if it's negative you might have to pay a few percent interest.

Very simple, easily automated. Were is you problem?

[ctwaterman]

The Only people mentioning borrowing from themselves is the PLAYERS....

That being said internatl loan where ones Governement borrows from its own private sector would be common historicaly.   However they may be very promlematical from the SIM point of view.   Nothing is decided on the Issue feel free to continue to discuss.

[Tanthalas]

Tanthalas, I don't see were you see a problem.
When I asked (quite worried) if we (again) would have to perfectly balance our income and expenditure (coupled with only rough tax steps) I was told that this will not be a problem. In favor of KISS we would be allowed to carry over a couple percent of our GNP from one year/report to the next. I think it would be only consequent if that could be both a positive or negative value. If it's positive nothing happens, if it's negative you might have to pay a few percent interest.

Very simple, easily automated. Were is you problem?

I never saw what was so hard about balancing my expences in N3... I realise there was a great deal of complaining about it, but I just never found it to be hard.  I actualy rather like the being able to bank some cash part, and as I have said before I dont have a problem with people loaning their extra cash to NPCs and other PCs who might need it.  My only issue is im sure some clever Rules Lawyer will find a way to abuse being able to loan themselves money, my example was admitedly pathetic im just not Devious enough to come up with a truely blatent example.

The Only people mentioning borrowing from themselves is the PLAYERS....

That being said internatl loan where ones Governement borrows from its own private sector would be common historicaly.   However they may be very promlematical from the SIM point of view.   Nothing is decided on the Issue feel free to continue to discuss.

made that point once already LOL, and if it is decided its ok to do oh well im just trying to get my logic acrossed

[Nobody]

Okay in this case, let me collect my ideas:

1) Loans between countries
No need for rules, just like other trades it's whatever they can agree to.
However, in this case Tanthalas, you would be correct. It might be very difficult to keep track of things in case the players change. Even more so, should these transfers have been made in secret.

2) Banking ones own money
Simple and very useful in many ways. Also simplifies writing reports for non "powerplayers". Should appear in the report.

3) Loans from oneself
Similarly simple as (2), but we should have rules/limits for this.
Why ctwaterman should this be a problem from the sim pov, if there are limits(up to x% GNP max) and penalties(paying interest or reduced growth for example)?