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I agree that spending 80% of income on constructions may be higher than ideal, however the $31k for QMG is FOR the military.

True Quantum. Of course the point still stands that our our income and expense are out of balance. And it's still true that our military is underfunded.

The insider deals between construction companies and the government are killing the taxpayers. Most of the companies that are building our hospitals and defense systems are owned by members of the government or former members of the government. If more companies could get a chance to sell to the government then the prices would be lower and more of the taxpayer's dollars could go to strengthening the military.

@neilp99. I agree that there is a tendency for the relationship between these GMs and the govt to be cozy.

I don't think the solution is to get more DS and hospital companies though. We don't really have a use for low Q DS or low Q hospitals. So, you need old players with deep pockets to provide these things. And they mostly tend to be involved with the govt one way or another.

"It takes taxes to get the money."

More specifically it takes tax receipts to get the money. Tax receipts is the product of the tax rate and the amount of the transaction.

I know that sounds pedantic and patently obvious, but many people (in-game and IRL) hear the short hand "raise taxes" as synonymous with "raise tax rates." An increase in the tax rate makes some transactions that were affordable at the lower rate, unaffordable at the higher rate. No transaction, no tax receipts. Increasing the amount of taxable transactions is the preferable way to increase tax receipts for the government. Everyone is better off. Raising tax rates makes most people worse off and may not even make the government coffers any fuller.

The best point that you make here is that our spending must be reined in to our revenue. eRep does not yet have a credible bond market so deficit spending is not much of an option. I just saw an infrastructure map of the eUS and scratched my head at the number Q3 and Q4 hospitals in the middle of the country when some coastal areas have Q1.

Hurling, I believe you are referring to the Laffer curve.
http://en.wikipedia.org/wiki/Laffer_curve
It's a theory that at certain tax rates you will receive higher tax revenue with lower tax rates. While this may be true at very high tax rates, it's not likely to be applicable below 50% tax rate. So it's not applicable here.

why isnt is applicable here? and prices would come down if companies had to (low) bid to get a govt contract...

@jasonalwaysready:
hurling's point was about tax revenue falling with tax rates rising. The Laffer curve doesn't apply at low tax rates, which we have.

Bring America on Top!

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A++

Americans are taxed heavily enough all ready, and its a huge drain on new citizens that cannot even afford to buy food or save for a house. Their wellness affects companies, and is a drain on productivity.

Instead of raising taxes, why not institute some fiscal responsibility? There has been no war for weeks, which means the country should have been stockpiling the money from tax revenue already (even after the Franco debacle). Even when the war module opens up again, this doesn't mean that we have to immediately declare war on everyone and rush off to spend all of our gold.

Keep a clean budget, and only spend the amount of revenue that is coming in. Basic government.

Ex-President Justin: Did you initiate all these expenditures for Infrastructure? As such, one would assume that any public backlash can rightfully be directed at your administation.



Buy Constructions: Hospital
Proposed by Justinious McWalburgson III, 4 days ago
Do you agree that USA should buy a hospital of quality 4 from Funke's Goodtime Family Band company at the price of 12500 USD for Georgia?


Buy Constructions: Defense System
Proposed by Justinious McWalburgson III, 6 days ago
Do you agree that USA should buy a defense system of quality 5 from FAQS Defenses Inc. company at the price of 26000 USD for Texas?


Buy Constructions: Hospital
Proposed by Justinious McWalburgson III, 13 days ago
Do you agree that USA should buy a hospital of quality 1 from What a steal company at the price of 1500 USD for Montana?


Buy Constructions: Defense System
Proposed by Justinious McWalburgson III, 18 days ago
Do you agree that USA should buy a defense system of quality 3 from Atlantis Defense company at the price of 12000 USD for Hawaii?


Buy Constructions: Defense System
Proposed by Justinious McWalburgson III, 23 days ago
Do you agree that USA should buy a defense system of quality 5 from Goliath's company at the price of 26000 USD for New Jersey?

Buy Constructions: Defense System
Proposed by Justinious McWalburgson III, 24 days ago
Do you agree that USA should buy a defense system of quality 3 from Israeli Military Industries company at the price of 12000 USD for North Carolina?


Buy Constructions: Hospital
Proposed by Justinious McWalburgson III, 27 days ago
Do you agree that USA should buy a hospital of quality 3 from Funke's Goodtime Family Band company at the price of 11000 USD for Alaska?


Buy Constructions: Defense System
Proposed by Justinious McWalburgson III, 29 days ago
Do you agree that USA should buy a defense system of quality 3 from Steely Glint company at the price of 11500 USD for Washington?

The Justinious McWalburgson III Administration Spent $112,500 of your money. Imagine the strength of the Military and of the economy had we spent it on buying Weapons, Gifts, etc from "DOMESTIC" sources.

Ohh well.. I suppose the ex-President can justify 5 Defense Systems and 3 Hospitals from 7 Companies as a fiscal responsibility. I personally would have spent the money on the widgets produced by 800 companies in America.

"Americans are taxed heavily enough all ready, and its a huge drain on new citizens that cannot even afford to buy food or save for a house. Their wellness affects companies, and is a drain on productivity."

Agreed. It takes more than a couple of days for new workers to drag themselves out of the productivity hole that their lack of skill puts them in. Right now anyone making anything below $1.72 USD cannot afford to buy Q1 food on a daily basis, and even those that do are going to suffer a net loss of wellness when combining training and working.

I would point out that while I don't expect the eUS to jump into an offensive war the moment the war module opens up, but with our surrent membership in ATLANTIS we cannot deny the possibility of eUS forces be dragged into a defensive war.

On the subject of construction: I agree with the article's assessment of the situation (an over-expenditure on construction as well as a questionable relationship between the construction GM's and the nation's policy-makers). I would like to point out that there has been talk in Congress (at least, I believer there has been) to shift policy away from making purchases, and to instead look to export these types of construction projects to our allies.

Thanks for those really really long comments Alby. BTW, president is the only person who can propose buying constructions. Justinious was following the same procedure as our previous presidents, so there's nothing new there.

What Justinious did that was new is he set up SADD where people like me get together and use our math and programing skills to figure out wtf is going on. We figured out that we're spending too much on constructions. We also figured out that if we want our military to kick ass, it needs more money.

The strongest nations in the game (I looked at Indonesia, Spain & Romania) all have lower taxes than we do now, and you want to increase them even more?

If taxes are not brought down, but increased, I - and I'm sure many others - will actively oppose the government. I understood the need for temporary higher taxes to refill the treasury, but now they have to go down, as was promised.

We have a huge population, most of them newbies, we shouldn't throw gold at these people! We have to become more organized and help newer people to actually participate in the battles by showing them that it will increase their wellness and their salaries.

Sorry, I meant to make the above comment with my character, not my org 🙂 Voted & subscribed btw

OneEye: You've got to be kidding me? Math and Programming skills are needed to figure out that a functioning Military needs Capital and that spending in excess of revenue is destructive?

I don't cite any error on your part. I'm more than confident that all the hard work you've devoted to SADD is well worth the effort. I'm taking a snip at such an organization is needed to determine what should appear to be obvious from a policy standpoint.

If a nation needs a strong standing army, those who volunteer for such duty to defend America should have a full complement of Q5 Weapons and a stockpile of Q5 Gifts to recharge health. All of which should be budgeted and obtained during peace time. When war does arrive, we are prepared. The military can allocate resources as it sees fit, but the policy from the top down should have been to spend money on Weapons and Gifts instead of every nickel on infrastructure.

Don't get me wrong, Infrastructure spending is important. But not at the rate it was pushed through in the last Administration. Although I suppose the people have spoken in casting their vote for leadership in the recent election.

I'm going to skip the politics and say good article one eye.
I would like to point out, once again, just how much of a waste DS's are:
http://www.erepublik.com/en/article/wasted-time-wasted-tax-dollars-and-the-most-useless-industry--732262/1/20

I was wondering if/when somebody was going to post that article.

@Alby

I had decreased government spending by over 40% from the administration prior to my own. I am sorry that we all cannot be as frugal and cheap as you, but I felt some sense of responsibility towards our Construction Industry who employee over 400 citizens.

I purchased all my constructions on a need to basis only.

Thanks for your continued feedback Alby. I know it doesn't take a bunch of math geniuses to figure out that more weapons = stronger military. But in this game we are very much limited in our resources.

You've seen in the forums how people will say what they think is best for the country, and don't agree. Because we have to balance our expenditures, it helps to have the math to tell us what we can and can't do and what the effects will be of various changes.

EG. With math we determined that we were spending a lot of money on constructions. We determined how much is costs to fight a war (thanks Kyle321n). We also determined that if we want a powerful military, it'll take more money than we're spending on it now.

So, how do countries like Indonesia, Spain & Romania fund their powerful armies? I mean, correct me if I'm wrong, but they have lower tax rates, yet outperform us every time.

Do they have a different source of gold? Or are they simply better organized?

I think the focus of our military spending should be on our tanks and on providing moving tickets to Florida and most of all *information* to our newer citizens.
Sure we can spend lots of money on handing out "free" weapons, which of course are not free at all, and disturb our markets. But until we find a way to mobilize our ridiculously huge army of noobs, we will remain an underperforming giant.

Also, could I get some links to important forum threads on the matter? I just joined the new forums, but I don't want to spend TOO much time on there looking for relevant threads. I'd especially like to see the Kyle thread about the cost of war

Gregoir

Those countries benefit from having extremely high taxes during Beta while the US has always had low taxes. They also benefited a lot from the Gold exploits of Pakistan and the like. Countries like those in Beta were very centralized with their hording of Invite GOLD. In the US we were very liberal allowing everyone to keep and use their GOLD the way they saw fit. Because of that we do not have to thousands of GOLD that they do.

Justin,

Thanks for the info, I didn't know about that. I spent my first month on eRepublik, the last month of beta, in Japan, and that whole issue apparently blew right past me. Four months into V1, they still have thousands of gold left from beta? That is brutal!

Nevertheless, the fact that over 400 people are employed in the DS industry does not mean that government should fund it. Quite a few people are employed in unprofitable RM companies due to them being located in medium or no productivity regions, and there is no point in tax money being spent on keeping these companies alive either.

The government, as well as the country as a whole, needs to become more efficient, and flushing dollars down the drain isn't going to help in that respect. Is there a way to find out about the government's current and expected (in the case of lower & higher taxes) tax income?

Maybe it's true we need higher taxes if we want to provide gold for the tanks, weapons for the noobs, DS's for the walls and low quality hospitals for no one. But if we limit our constructions purchases even more, and let citizen-soldiers buy their own weapons, we can cut spending by a whole lot I would say. I just don't see the point in giving out free weapons, especially to noobs, who already have plenty of incentives to participate in battles, provided they know how to do it correctly.

Less spending and more information is the key imho

@Gregoir

We agree on spending less for constructions. Great.

I'll differ with you on funding the military though. Q1 weapons are really cheap, and they make our noobs fight twice as well. Preliminary analysis shows them to be about as cost effective as tanking. Boosting our noobs will help make them more powerful quickly. It's more fun, it's an investment in our future army, and it's not a waste of money for the current battle. Supplying our poor noobs with weapons is full of win in most every way.

Voted and subscribed. Your genius is pure win!