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One thing I really have never seen in real life is deflation and I got to experience it here in erepublik. I think I figured this out and then learned about what economists thought so I am pretty proud of myself. You will find economists that recommend inflation and economists that prescribe deflation as a positive factor in helping overcome an economic downturn I did hear this tidbit and it set my wheels in my head to turning. This gave me a fuller understanding of the relationship of taxing and spending. While in practicality I could still say I don't like high taxes the fact is I don't like government spending. High taxes don't hurt me or anyone one bit it is the spending of money that dilutes the value of the remaining money I have so that I cannot buy as much. My money simply competes for finite goods against a larger pool of money than would exist if the government did not s

All poor economies are an imbalance in production. People want what they want and it is our job to give that to them otherwise we don't get as big a share of the pie. People guess what everyone else wants then we find out later when people vote with their pocketbooks and sometimes change their vote. You please me and you get a large portion of my productivity. If my production is pleasing it demands others production. Money assists in directing the economy if it is allowed to. Money bouncing around fast or slow or more or less is really irrelevant unless you royally mess up.

Which would you really rather have, more stuff that you want or bigger numbers on everyone's currency? Have you ever asked why doesn't everyone get a million dollars then everyone would be okay. Would you rather live like a millionaire or have everyone have a million dollars to compete over an unchanged amount of stuff. I am not suggesting these are two options, they are simply totally unrelated. Spending money to stimulate an economy is totally meaningless. If everyone saves money and doesn't spend it, that is a deflationary pressure. It is not something I advocate but something I learned from. Do people really forget to spend money and buy stuff they want? Do people really want what they don't buy themselves? Did everyone forget to lower their prices and lower their pay to attract purchasers? If you can lower prices all down the line that is called deflation. If you cant the economy has decided that you are wasting resources if you can't make money any more.

Stimulus does not and cannot do anything. You cannot change demand or increase demand for everything because one person's production is his demand for products and services on the market. If you destroy old vehicles then you create demand for a specific type of object sure, but you decrease demand because there is less wealth to demand goods and services. The 500$ vehicle is gone.

If the Government cuts back on spending they simply place decision making for the direction of the economy in the hands of those who produce what everyone wants. Those are the very people who need to be stimulated. People who don't produce what we want are stimulated by lack of support in continuing to make what is not needed.

Again, high taxes are neither bad or good they just tend to be in bad company. If something weird happened like no one was allowed to join the game and there was inflationary pressure from lack of players or something I would be okay with high taxes without spending to soak up extra money.