Concerns about inflation

[Hesam Jayatar]

Ladies and Gents,

I would like to assure you that there is nothing to fear about inflation. Currently, The Crown Account (The Government Budget) is set at 5000 erb. This is the total sum of the governments spending. This money was put into place so that the government of Shireroth could PAY the citizens for the work they've accomplished. There is no need to worry about funds being created out of thin air. There is currently a static amount of erb in circulation. With that in mind, it means that the value of the erb, and therefore the vote, will level out to an average.

As well, there should be no fear for the government going bankrupt, the 5000 in the crown account was created SPECIFICALLY to be given out. Should the government require more erb for another reason, issues of taxation could be put before the Landsraad.

As I designed this economy, if you have any questions feel free to PM me.

[Yvain Wintersong]

That's true, but a lot depends on how quickly it's given out.

Right now, I cannot charge 250 erb for a graphic, even if it's a very good one, because most people have less than 250 erb. Most Duchies don't even have 250 erb. A more reasonable price would be 25 erb. But once the entire Crown account is distributed to people and Duchies, 250 erb is exactly the sort of price that would be reasonable for a very difficult job.

Right now the Crown is almost the only entity who it's worth getting money from. It just paid you more for your story than the average citizen of Shireroth could possibly pay anyone for anything. That means it's not worth taking money from the average citizen of Shireroth (except at high markups), only getting government contracts.

[Hesam Jayatar]

Shirekeep wasn't built in a day. You're right, currently most people don't have much money. But this bill was only passed a few hours ago. I think if we all take a deep breath, we'll realize the sky is not in fact falling.

If you have a question, PM me.

[Aurangzeb Khan]

Actually I paid him as Duke from my own money for the re-imagining of the County of Bjorngard, which is more than one story. If I've overpaid him that's my problem.

Should there a prices commission or are we content to rely on the free market?

[Hesam Jayatar]

I'm happy with the free-market, but if someone wanted to write a price guide that would be appropriate as well.

[Krasniy Yastreb]

As much as it goes against every fibre of my being to say this, I think the Invisible Hand will take care of things. As long as no more money is printed, the inflation will stop eventually...

[Yvain Wintersong]

I think you're right that the economy is stable in the long term, but I'm right that it's inflationary in the very short term. As soon as enough money gets into the system that Crown gifts aren't disproportionately large, we'll be fine (except we'll probably have to institute taxation).

[Aurangzeb Khan]

Yeah I am against creating new money straight off the bat so that we avoid ending up billionaires Zimbabwae style. However a price index would probably be useful so that we know what is a fair base rate for a story or a graphic etc.

[Hesam Jayatar]

Taxation is a given. The Government gives out money to generate activity and culture. To account for the money spent, the government must tax the dukes. The Dukes will tax the Barons and so forth.

[Jess]

It should all work out, mainly because if we all buy and sell stuff, stuff should all work out

Low prices though

Omega Graphic= 0.25 Erb

[Hesam Jayatar]

If an Omega graphic is .25 Erb, I will commission 4 portraits of Kaiser Hasan Kalir. One of him in the thick of Battle against Bosworth, One of him presenting the economy to Shireroth, One of him uniting the Jacobite and Babkhan factions and one of him being tragically assassinated. Oh, and I won't pay if they aren't good.

[Jess]

They will be done within the next week.

[Hesam Jayatar]

correction, the SYSTEM TOTAL is 5000 erb. So Inflation is even less of an issue.

and Jess, if they're good, I'll give you a fair price.

[Jess]

OK Then

[Erik Mortis]

is this where we start talking about Taxes?

[Hesam Jayatar]

If you like.

I addressed this in the Landsraad front gate though. I believe that considering the autonomy given to each Duchy, it would be more responsible (and more interesting) if the Kaiser (ie The Crown) only taxed the Duke's. And that it's the Duke's responsibility to come up with the money. Which likely means taxing the barons. Who in turn, must tax the counts and so forth. Why do this? because we're an absolutist system. In addition, it gives more diversity to a number of points of view:

- Dukes that don't like the idea of their barons having alot of erb, will be able to tax the living hell out of their subjects. This keeps the power in the hands of the Duke. This also means Barons will have to tax their counts to keep the money coming, Which eventually means:

MICRONATIONS FIRST REAL CASE OF SIMULATED CLASS WAR!

A very very awesome concept to think about for our hobby. This leads others to think:

'Ok, How can I avoid "Duke Bloggin's" problem of his subjects rising up against him?"

Some of the other options would be Dukes that allow for a "tax free zone" to subjects, but ONLY tax companies.

Or, Tax free Duchies all together, (how would they generate the appropriate revenue? who knows, but someone will try it).

I digress, tax money then makes its way to the minitrade who pays government contractors. What's the benefit? Well, if "someone" were to open an employment agency, it would be possible that they could get a subsidy from the Crown for providing a public service, and they would also be able to garnish the wages of the employed. Why would someone do this? Because if the unemployed person lived in a highly taxed Duchy, they would HAVE to pay taxes somehow.

[Malliki]

People can move freely here. A barony without taxes, for example, could in theory attract a lot of people while a barony with heavy taxes would be drained.

[Hesam Jayatar]

exactly, and of course the delicious problem is that sure, you can get people to immigrate with low or no taxes, but how are you going to pay your debt?

[Andreas the Wise]

I've seen a very similiar tax system in Toketi (taxing their Dukes, dukes taxed subjects to make up the difference). That or a head tax are our only real options. I'll look at this a bit later, when I'm done Minitrade round two and civil war. I have ideas, just don't have time ...

[hypatias mom]

Taxation has always been a delicate balancing act: tax the subjects enough to provide for the country's and duchies' expenses without draining the populace and making them impoverished. Many rulers of the past (and present) have gotten it wrong by taxing their subects into starvation while they themselves lived richly. They deserve a citizens' uprising. A wise ruler will frequently "take the temperature" of their subjects to keep themselves aware of the state of their wellbeing. With taxes too low, there is not enough money to run the necessary functions of government; too high, and people's finances will break.