Author: bonanza
Translator: White Queen
Everyone who followed the news during the last weeks, should know what the subject of this article will be. Greece has one, Germany as well and even China is in. Less well known is that individual countries in the Federation receive a credit rating as well. State finances, it is not the easiest subject for conversations in the Federations, but it does influence your daily life. How are these things going in the Federation and why are politicians keeping the country rating so secret?
To speak bluntly: because they are bad. Or at least, at the beginning. I am pretty well informed about the Cyberian state finances and so I will write this article based upon those, but it is perfectly applicable for other countries in the Federation, because everybody is dealing with the same problems.
The state budget is a sum of all incomes and expenditures done in a country. Incomes are amongst others the revenues from lot sales, VAT, fines and production costs. Expenditures are the budgets cities receive, the 1.000 ISH you receive at the beginning of the trading period and all auctioned products.
In the past we received a starting budget from the Federal Government to be able to pay these first expenditures (cities for example have to receive 30.000 ISH before the start of the trading period). These days the Federal Government is a little less generous and we no longer receive the reserves we’ve build up earlier. So we start with an empty treasury. From that empty treasury we do have to pay the city budgets immediately (120.000 ISH for Cyberia) and all 1.000 ISH starters money that Cyberians receive. That means that we start the trading period with a hole of almost 200.000 ISH in the red numbers.
At this moment we do not pay interest on these debts and so it is not that bad to have a negative budget. However, this does have important consequences. Cyberia never reached the 0 during the first week this trading period, so the basic needs like ministries, courtrooms, police stations and exam rooms could not be started. Thus, ministers are literally a week unemployed, even though they are legally obliged to get things running earlier.
The cities are starting to have problems as well after such a long period. The bad situation should not have taken a day longer, or there would’ve been serious problems for the Cyberian economy. The tourist boom the Federal Government send into the Federation saved Cyberia just in time (and probably the rest of the Federation as well).
After the first week the money kept flowing in and the mayors did not know where to invest first. The result is clear. The Cyberian cities are having nice surpluses of more than 30.000 ISH and the national treasury has almost 400.000 ISH that will never be used before the end of the trading period.
The question that appears then is whether it is positive that we are so depending on Federal input to save our economy at the beginning of a trading period and that we do not know what to do with all these surplus I-Shells at the end of the trading period. Why are we not allowed to take control ourselves and decide our direction? Why can’t there be a more balanced policy?
The Solutions
The conclusions are simple: there is too little money at the beginning of the trading period and there is way too much money at the end of it. The needs are the reverse of the reality. We need a lot of money in the beginning of the trading period to support the economy and we need less at the end when the economy can sustain itself.
The Federal Government should think of a new system that takes these facts into consideration. There should be some sort of central bank where countries can borrow and invest money. Loans on long terms (at least a week in this case) could be terribly expensive (for example 50 to 100%) to avoid excesses. This way governments will be stimulated to invest smart, because if they loan too much, they will have to be frugal in the second and third week to be able to pay their interests. This system does provide the possibility to have enough money in the begin of the trading period when it is most needed.
This means you should be able to invent a system that does not require any game changes, but will benefit the economy and will allow to get the social part (like justice) working earlier. Taking a loan on day 1 for the duration of 1,5 week is more expensive than taking a loan for 1 week. The later in the round you borrow, the lower the interest (it shows a certain problem in the country).
But the contrary can also occur. The Federal Government whishes that the cities are not gathering excessive amounts of money and because of that they abolished the treasuries that were carried over the rounds. However, this does take away any incentive for the countries to be economic with their money in the last week when trade begins to decline. Why shouldn’t there be a possibility to invest surpluses of the treasury (which will be lower anyway because of the interest that should be paid over loans) in the Federal Central Bank, after which the Federal Government will invest extra in tourists for the country? It gives countries the possibility to invest their money in a good way and it will support the trade when it seems to come to a standstill.
Federal Government, please give countries the possibility to lighten the precarious situation at the start of the trading period with (expensive) loans and offer then the option to invest the surplus of the treasury in useful projects which will be in the best interest of the citizens. Make the Federation an AAA rated credit system!