Why our President is wrong, so terribly wrong..
Day 449, 15:05
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Published in USA 
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by
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by SebastianA
Ok – I know, Uncle Sam is out president, and also ranked as eUS #1, big deal. As we all recover from the nearly god sent deceleration of genius, lets look at why Uncle Sam, or Mr. Preseident is horribly wrong.
First of all, Sammy states that high taxes stimulates the economy. Ok.. If Sam ignores that there is a market, and the fact that people pay taxes whenever they work – sure taxes stimulate the market, however since we have a private market in erep which bases itself on that people spend and make money, this statement becomes a bit wobbly.
High taxes means that the government receives more money – or in other terms that the government has control of more money as the amount of cash in the treasury is larger. The amount of money in the treasury means less money amongst the public – which is us. Now, when the we have less money, we spend less money, that is the instinctive reaction from human psychology so there is no reason to argument against that.
When the public spends less money it doenst matter really hoe much the tax is as the public will keep all of their reserves to themselves buying Q3 food instead of Q4 food etc. This means less income to the government. Less income to the government means more taxes to make up for this. You get the point...
This is NOT a way to “stimulate” (which you, so fancily abuse) the economy, Uncle Sam – it is a way to devastate the economy.
Yes, I realize the treasury is gone and I understand that you as President is very eager to restore it, however that is not a problem for the market. It is a problem for you, mr. President.
A treasury of several 10-thousands of dollars cannot be restored over night, neither over a week, or even a month which you hope because you want to be re-elected. A treasury is acquired over time, and increases as it ages, as a man gaining experience as he ages and it takes patience.
The treasury can only be restored if you decrease the taxes, and slightly increase the VAT. This will increase the public's spending substantially, it will increase the governments income (because of the massive public spending) and THIS will stimulate the economy, my Uncle Sam.
And before you start accusing me for mixing in RL economics in this, I wish to say that this is not RL economics, it is human behaviour, and therefore the behaviour of the general public which applies both in erep and in rl. To bad you are not brave enough to take the step.
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Another reason
An Open Letter to Uncle Sam
http://www.erepublik.com/en/article/an-open-letter-to-uncle-sam-733854/1/20
Heh, well maybe, though I am not much into personal attacks, but more chase and politics 🙂
@Rhane: Read it. Lovely absurdist humor.
@Sebastian:
1) Did I miss a press release from The President? Didn't we just pass a reduction on taxes?
2) While money in the treasury may not be amongst the general public, that money is still pumped back into the private market via the government purchase of construction projects. (Also, am I right in thinking that the eUS government will be supplying weapons to our soldiers in the upcoming wars?)
stimulate
"at money is still pumped back into the private market via the government purchase of construction projects."
Again, goverment spending does NOT stimulate the economy unless there is a stop in the general market brake (recession). And even in recession goverment spending results in inflation (price raise) which in the RL is about 2% each year, where in Erep its between 15-20% each month.
Yes the goverment supplies the Marines with weapons, though it has been troubles with that lately, at least thats my experience as Lt. of platoon 2 company A
But I'm talking about large-scale Q4/Q5 DS and Hospital purchases here. There is no private market for goods of that size and cost.
I am not competely sure what you mean. eUS does in realty dont need more than 2-3 Q5 hospitals. Florida has one and it the base of most military as far as I know. And being based in flordia the military can defend the entire country - so why have several Q5 hospitals?
Though, this spending does still not stimulate the economy. It forces the goverment to spend treasury money- which in turn creates inflations. If you want your food to become 10-20% more expensive er month thats fine. But eUS is not in need for Q5 hospitals in each state, not right now and nto i nthe forseeable future
I'm not saying we should blow the treasury on construction projects. Far from it, I think we should definitely A) Commit to an overall reduction in government spending and 😎 Shift our focus away from the purchase of construction projects, and towards supplying our military (along with working to make it more effecient and effective overall).
However, I felt the need to point out that your implication that money taken in taxes is effectively gone from the private market is a false claim.
Taxes of food on has been reduced to previous levels. Gifts and wood is still raised. Weapons are about to get raised to.
Flat income tax please there is no good reason not to do it
Well if increased taxes revenue wouldn't be spent on construction projects (since we seem to already have enough) then the only other option for getting the money back to the private sector is military spending.
So I guess the debate is now whether increased spending on military with the treasury money would be enough to offset the negatives of raising the taxes on the private sector.
Whenever the goverment pump money into the private it leads to inflation.
Yes I support military spending, but raising the income tax is not the way to do it.
"The treasury can only be restored if you decrease the taxes, and slightly increase the VAT. This will increase the public's spending substantially, it will increase the governments income (because of the massive public spending) and THIS will stimulate the economy, my Uncle Sam."
hmm, I wonder if that's what I'm trying to do with the weapons tax? war increases demand and products will be bought. Also, taking money out of the economy makes the dollar value stronger, which hasn't happened yet, however it will solidify our dollar value so that it doesn't drop too much during times of war. Obviously, you didn't take notice of these kind of things.
oh and lol at the notion of saying a decrease in taxes will restore the Treasury.