The eUS Achilles Heel and why we won't fix it
Day 500, 11:19
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Published in USA 
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by
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by ssomo
This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children...This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. -- Dwight D. Eisenhower, 4/16/53
Fifty years ago, Ike spoke these words as a former Supreme Commander during World War II and as a newly elected president of the RL United States. He understood -- as the admin does who created this game -- that IRON is a vital resource in conducting war.
That’s right: IRON is our Achilles Heel. The admin knows it. Everybody knows it. Failing to strengthen this vital industry weakens us militarily, diplomatically, and economically.
It sends one signal loud and clear: The eUS is too dumb to cover its ass.
Some background
For those new to eRep, iron is the resource material (RM) used to make weapons. Weapons are used to fight battles during wartime. The top war-making countries, Romania and Indonesia, have ‘high’ iron producing regions. ‘High’ iron regions produce twice the amount of iron per unit of productivity that ‘medium’ regions produce. That is to say, ‘high’ RM regions are twice as efficient as companies set in ‘medium’ RM regions.
The Achilles Heel
For reasons best known to the Romanian admins running eRep, the eUS has no ‘high’ iron producing regions. Never mind that the Iron Range of Minnesota produced records amounts of iron ore during the first half of the 20th century. Whatever.
Instead, we have four ‘medium’ iron-producing regions: AZ, NJ, NV, and UT. This means we need two iron mines here in the eUS to produce the same amount of iron as a ‘high’ iron region elsewhere.
We produce much less iron than we need. Without a robust domestic iron industry we must rely on external sources for iron. Right now that means Spain and Romania and to a lesser extent Norway. For example, we have no Q3 iron companies in the eUS, yet around 40% of the iron for sale on the market is Q3 iron.
During Operation Taco Bell, when both iron and weapon prices tripled, it was painfully obvious – during a national emergency – why we need this part of our economy to be strong.
Why this won’t get fixed – without your help
The people running the eUS like low import taxes on all resource materials. Correction: Import taxes on wood, oil and grain -- our 'high' RMs -- stand at 30%. This is an ideological bias based on RL economics – that ‘free markets’ are the magic bullet for economic prosperity and that raising import taxes on a vital national resource like iron is somehow ‘socialism,’ ‘isolationism,’ ‘economic nativism,’ or just plain ‘stupid.’
But here’s the second, less articulated reason: Many eUS-owned companies operate overseas. For example, much of the iron on the eUS market now comes from Spain – and many of those companies are owned by eUS citizens.
The solution
Surrendering the domestic iron industry to be overrun by foreign iron -- even as we prepare to spend thousands upon thousands in GOLD, collected from workers as income taxes, to defend this nation -- is a self-defeating policy that will be exploited again and again by our friends and adversaries alike.
We need to level the playing field for domestic iron by raising the import tax on iron to 50%. The math is easy. Foreign iron firms can produce twice as much per person per day; therefore you tax them 50% to level the playing field. The best part: eUS taxpayers won’t spend a dime for this solution.
Everyone knows it's an eWorld of chaos out there. However, we have a choice. We can strengthen eAmerica by reducing our economic weaknesses. Or we can drift along on foreign iron leaving our fate in the hands of others.
Fifty years ago, Ike spoke these words as a former Supreme Commander during World War II and as a newly elected president of the RL United States. He understood -- as the admin does who created this game -- that IRON is a vital resource in conducting war.
That’s right: IRON is our Achilles Heel. The admin knows it. Everybody knows it. Failing to strengthen this vital industry weakens us militarily, diplomatically, and economically.
It sends one signal loud and clear: The eUS is too dumb to cover its ass.
Some background
For those new to eRep, iron is the resource material (RM) used to make weapons. Weapons are used to fight battles during wartime. The top war-making countries, Romania and Indonesia, have ‘high’ iron producing regions. ‘High’ iron regions produce twice the amount of iron per unit of productivity that ‘medium’ regions produce. That is to say, ‘high’ RM regions are twice as efficient as companies set in ‘medium’ RM regions.
The Achilles Heel
For reasons best known to the Romanian admins running eRep, the eUS has no ‘high’ iron producing regions. Never mind that the Iron Range of Minnesota produced records amounts of iron ore during the first half of the 20th century. Whatever.
Instead, we have four ‘medium’ iron-producing regions: AZ, NJ, NV, and UT. This means we need two iron mines here in the eUS to produce the same amount of iron as a ‘high’ iron region elsewhere.
We produce much less iron than we need. Without a robust domestic iron industry we must rely on external sources for iron. Right now that means Spain and Romania and to a lesser extent Norway. For example, we have no Q3 iron companies in the eUS, yet around 40% of the iron for sale on the market is Q3 iron.
During Operation Taco Bell, when both iron and weapon prices tripled, it was painfully obvious – during a national emergency – why we need this part of our economy to be strong.
Why this won’t get fixed – without your help
The people running the eUS like low import taxes on all resource materials. Correction: Import taxes on wood, oil and grain -- our 'high' RMs -- stand at 30%. This is an ideological bias based on RL economics – that ‘free markets’ are the magic bullet for economic prosperity and that raising import taxes on a vital national resource like iron is somehow ‘socialism,’ ‘isolationism,’ ‘economic nativism,’ or just plain ‘stupid.’
But here’s the second, less articulated reason: Many eUS-owned companies operate overseas. For example, much of the iron on the eUS market now comes from Spain – and many of those companies are owned by eUS citizens.
The solution
Surrendering the domestic iron industry to be overrun by foreign iron -- even as we prepare to spend thousands upon thousands in GOLD, collected from workers as income taxes, to defend this nation -- is a self-defeating policy that will be exploited again and again by our friends and adversaries alike.
We need to level the playing field for domestic iron by raising the import tax on iron to 50%. The math is easy. Foreign iron firms can produce twice as much per person per day; therefore you tax them 50% to level the playing field. The best part: eUS taxpayers won’t spend a dime for this solution.
Everyone knows it's an eWorld of chaos out there. However, we have a choice. We can strengthen eAmerica by reducing our economic weaknesses. Or we can drift along on foreign iron leaving our fate in the hands of others.
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raising the tax they won't export the iron here which means were gonna end up with even less iron
The only people that plan would benefit is the people who own iron companies in this country. Everybody else would be screwed by higher iron prices and higher weapons prices.
we make less than 20% of the iron that we need, and if you raise imports it will help domestic companies but guess what, it will hurt us all and it will come out of the citizens money because the prices will simply be higher.
Yes, that will create more domestic companies but we need foreign iron, and you know what, we can do it. Here's how
US citizens create orgs and make iron companies in other nations like Spain. Then, the US citizens import to the US with 1% import tax... that way it is "foreign", high, but really puts money in the hands of US citizens.
Cutting out foreign iron will destroy us, getting ourselves a high iron region would be great. But all solutions, even mine, have weaknesses.
yours would make prices rise without a doubt, even after the market would normalize with domestic iron companies they can't afford to make a sale at the same price as a high iron company and thus with in a comfortable market will sell iron for higher prices.
Perhaps raising it slowly will help.. but all at once will paralyze us.
The easier solution would be for the eUS to stop being squeamish about conquest and acquire a high iron region by force of arms.
There is a similar situation with us exporting to the Spanish wood markets, the Swedish oil markets, and other markets, just reversed. And guess what? American citizens still make a killing. So arguing that would kill our market is silly, because obviously their markets are still growing strong.
This is ridiculous, why would we add an import tax which would make iron prices much higher. That would make weapon prices higher. Which would gasp...make it harder for us to fight a war. Support against an import tax is not based on RL ideologies, its based off of people actually understanding the game.
I also agree with Eugene, if we acquired a high iron region you could all stop whining.
@Eugene, I was waiting for it. I almost agree.
That's exactly what we need to do Eugene
Let's get that high iron region. Iran has two high regions in Siberia, I'm sure they wouldn't mind letting us have one.
For taxes, what about a slightly higher import tax on iron, say 20%.
But no VAT taxes on weapons? Work it out so the weapons price is about the same, but the tax is being paid by foreign iron companies.
I'd be in favor of a military campaign directed at getting high iron.
i'm with sprout
if we are to survive we need to take what we need
"The easier solution would be for the eUS to stop being squeamish about conquest and acquire a high iron region by force of arms."
Amen.
Heh, I dont really think that iron is entirely the reason - its not hard for U.S. business to set up a company overseas and import iron to the U.S.
The problem for the U.S. is that it really lacks good soldiers. I think Benn is the only FM in the U.S., and there arent many (if any) behind him who could crack 200 damage in a single fight.
I'm with sprout. We need a high iron region.
To the doom crow😛 Nonsense. The market will simply adapt to this change if we make it.
1 - On the foreign side: A 50% import tax will not cut off our market to foreign producers. Nor will they abandon such a huge and profitable market for their product. It will simply cut into their profit margin & and level the playing field for domestic producers.
2 - On the domestic side: Just like people enterred the weapons market when prices spiked, you will see people enter the iron market domestically if we pass this import tax increase. In time, domestic iron will restore equilibrium to iron prices AND we'll have a domestic iron industry -- within our borders -- committed to our national security in times of crisis.
@ Eugene and the high-iron region advocates
I hear you, and that's where I started when looking at this Achilles Heel. But what region? Nothing is nearby. And we do not have a very good track record of conquest. That's a weakness of geography that is an advantage if we view it as a chance to develop domestic industry.
@ B Franklin
You raise an interesting alternative. I would not rule out a compromise, if that is where the interest is in Congress. But IMO, doing nothing ensures further trouble down the road.
I work for an American owned iron company in Spain that sells exclusively in the US.
My guess is that if import taxes were raised to such levels, my company would either start selling in the Spanish market, or avoid the tax by selling the iron to US arms makers via private contract.
Import taxes are pretty easy to dodge.
In the short term, I think we need more US owned companies in Spain and Romania.
Long term, I think we need to pursue a military solution.
You guys need to conquer all of south America
Plenty of ress there
Just to point out: The eUS currently has 30% import tax on the RMs for which we have 'high' producing regions.
Oil, grain, woo😛 All structured exactly the way everyone is refusing to protect our weakest link. Crazy.
I have talked to many of the people who own U.S iron companies in Spain, and they actually admit that a tariff wont kill their companies. They argue that it wont help a lot, and that is why we shouldnt do it.
Well, if it doesnt hurt, do it. 50% levels the playing field, so they make the same profits a domestic iron company can make, while at the same time raising the amount of profit a domestic iron company can make. Once The iron companys have proved to make money, many will jump into the iron market, providing our country with a strong iron market, perhaps eliminating the need to get a high iron region.
Eugene, i support conquest to gain a high iron region. But its just not going to happen any time soon. And im for building up our domestic iron companies so that they will be able to provide for such conquest.
I was just joking about Iran letting us have the region in the post above, we need to go take one of these:
http://www.erepublik.com/en/region/Liaoning
or
http://www.erepublik.com/en/region/Heilongjiang
I think that the 50% is scaring people. Maybe, a compromise of bringing it to 30% like the other industries may make it easier to get passed, then raise it incremently over time to the 50%. I think the conquer solution is short sighted. How much will it cost to conquer a high iron region but also to maintain it over the long haul? And if we lose it, what kind of chaos will that cause on our markets?