NationStates Jolt Archive


Reducing the Budget(AMW)

Buristan
22-12-2006, 18:25
Stavros Panagiotis Solterros looked at the budget plan for 2007, it was horrible, the governments defecit, standing around 5% of the GDP, grew each and every year, it was expected to balloon to 7% after the next year alone. When he was elected into his office, he emphasized the need to cut the budget, and then to reduce the taxes on his people, to help stimulate the economy. It seems now however, that the second portion of his campaign promises was a mere pipe dream of his imagination.

The first portion however, still had time.

He looked at his budget sheet, hoping to find something, anything, that would help to reduce it. He scored the pages only finding two things that he could cut in order to allow him to leave his office with a legacy of fiscal responsibility in 2010, social welfare.
Moorington
22-12-2006, 18:32
Austria awaits developments in Greece before making a formal position.

(Tag)
Quinntonian Dra-pol
22-12-2006, 22:39
The Quinntonian people would most likley piont to your rather ;large military budget, but since you are bordering Yugo Slavia, and the new Ceaser of Roma has just announced that it is his goal to re-unite the Eastern and Western Empires, we would definately excuse you for not doing so.

WWJD
Amen.
Buristan
22-12-2006, 23:23
The Quinntonian people would most likley piont to your rather ;large military budget, but since you are bordering Yugo Slavia, and the new Ceaser of Roma has just announced that it is his goal to re-unite the Eastern and Western Empires, we would definately excuse you for not doing so.

WWJD
Amen.

OOC: Would you subsidize some of my industries? Also, where could I find a list of the Greek governmental expenditures? Finally, I thought of dismantling the military, but I fear Yugoslavia.

IC: In order to futher balance the budget, the President has annnounced a new tariff on petroleum products, a tariff of twelve cents to every dollar, effective on all petroleum-based products.
Quinntonian Dra-pol
23-12-2006, 03:32
I think that the Quinntonian government could perhaps work out some kind of trade deals and so on but we will have to wait and learn a little more about your government and your people first.

OOC-I want to see more about your nations, keep going with develioping it, you are doing great. How about you try and contact the Ottomans? And Yugo Slavia? These are your nieghbours, you should start to develop your relationship with them.

WWJD
Amen.
Fleur de Liles
23-12-2006, 06:12
OOC: The deficit is the last thing you should be worried about in this tumulteous time in AMW. Besides, economics do not work the same way in AMW as in RL.
Buristan
23-12-2006, 06:53
OOC: But economics is my passion, Fluer, I am a self-professed economics nerd. I am a firm believer in the doctrines of Milton Friedman, and a slight Kenyesian, however, I think that everyone is a Kenyesian. What are the differences in AMW economics?

Quinntonia: I was planning on talking to Yugoslavia and Ottoman tomorrow, I just wanted to get this out there before I did it. Give myself a bargining chip with a free trade claus in an NAP
Fleur de Liles
23-12-2006, 07:45
It sounds like we could get along fairly well when I acquire Germany. I am thinking about proposing some sort of German centered EU. I could give you more access to the German economy in exchange for pro-Christian and pro-German policies. This would more than alievate your economic problems. I am going to run Germany in a more political fashion than Quinntopia and will be very interested in getting friends against the Soviets but also friends who would support me more than the HL simply because they are so tremendously powerful in Europe. Your libertarian policies would likely offend the family centered, ultra conservative German country that I am currently thinking about but they might be willing to overlook some of those policies in order to gain a friend. But its still in the air and will likely be for some time so we will have to talk more in the future.
The Estenlands
23-12-2006, 10:06
Interesting.
Tsar Wingert the Great.
Armandian Cheese
23-12-2006, 20:27
OOC: But economics is my passion, Fluer, I am a self-professed economics nerd. I am a firm believer in the doctrines of Milton Friedman, and a slight Kenyesian, however, I think that everyone is a Kenyesian. What are the differences in AMW economics?

Quinntonia: I was planning on talking to Yugoslavia and Ottoman tomorrow, I just wanted to get this out there before I did it. Give myself a bargining chip with a free trade claus in an NAP

Good to see another econ nerd in AMW. Hail, Adam Smith, Milton Friedman! :)

AMW Economics is different in that we have to accomodate political beliefs ranging from pure dog-eat-dog capitalism to dog-eats-us-the-corrupt-bourgeouis communism, so we allow a little bit of free reign in the effects of your policy. It's still important, however. When I was roleplaying Russia, I spent at least half of my focus on developing the Russian economy, and I understood it to be a major driving force of my foreign policy. If you can detail economic plans and development in an interesting way, then by all means, go for it.
Buristan
24-12-2006, 03:08
Good to see another econ nerd in AMW. Hail, Adam Smith, Milton Friedman! :)

AMW Economics is different in that we have to accomodate political beliefs ranging from pure dog-eat-dog capitalism to dog-eats-us-the-corrupt-bourgeouis communism, so we allow a little bit of free reign in the effects of your policy. It's still important, however. When I was roleplaying Russia, I spent at least half of my focus on developing the Russian economy, and I understood it to be a major driving force of my foreign policy. If you can detail economic plans and development in an interesting way, then by all means, go for it.

I was originally going to go for complete and utter free trade, but free trade is really only benificial to the ones with the better economy, and compared to my European neighbors, that is not me.
Moorington
24-12-2006, 04:46
I was originally going to go for complete and utter free trade, but free trade is really only benificial to the ones with the better economy, and compared to my European neighbors, that is not me.

Well, look at Dubai, it was potentially the saddest little Emirate of the United Emirates, and now with its free for all capitalism. It is rivaling Singapore and such, its GDP has increased 12% a year, it has little radical Muslims, Christians or fanatical follower of same local religion blowing themselves up because Domino’s Pizza ran out of anchovies.

Regardless, if a capitalist approach is launched, Austria will easily fund any initial investments in infrastructure and will encourage investors to buy off the massive, government owned, companies that are currently sapping Greek’s budget.
Buristan
24-12-2006, 18:40
OOC: But Abu Dhabi has something that Greece doesn't, that being exportable oil.

IC: President Stavros Panagiotis Solterros introduced a bill to the National Assembly, ordering the creation of a national bank. He encouraged the members of the Assembly to pass it before the upcoming bill before they leave for the Christmas holiday on the First of January.
Moorington
24-12-2006, 20:33
OOC: But Abu Dhabi has something that Greece doesn't, that being exportable oil.

IC: President Stavros Panagiotis Solterros introduced a bill to the National Assembly, ordering the creation of a national bank. He encouraged the members of the Assembly to pass it before the upcoming bill before they leave for the Christmas holiday on the First of January.

OOC: Which is currently 6% of its GDP. Singapore doesn't have any oil either, nor Hong Kong and not Japan. With enough investment, it'll work, with enough Austrian investment, it'll assuredly work.
Armandian Cheese
24-12-2006, 23:57
I was originally going to go for complete and utter free trade, but free trade is really only benificial to the ones with the better economy, and compared to my European neighbors, that is not me.

...that's absolutely not true. The Law of Comparitive Advantage states that both sides will benefit as they will specialize. For example...

You have country A and country B. You have product Fish and product Meat, for a basic example. If they both focus all of their resources on Fish, A can produce 100 Fish and B can produce 200. Alternatively, if they focus on Meat, A can produce 100 Meat and B can produce 400. B thus has the absolute advantage in production.

So the basic logic seems to lead us to conclude that Country B should just produce for itself, because it can produce more, right?

WRONG.

We have to factor in something called opportunity cost. Opportunity cost is the benefit you could have derived from the next best possible use of the resource. So for example, the opportunity cost of studying for a test is not being able to attend a party. In this case, the cost for A is 1 Meat per 1 Fish and vice versa. But for B, it costs 0.50 Fish to produce one Meat, and two Meat to produce one Fish. Thus, we have to find the option that causes the smallest opportunity cost. In this case, B producing Meat would only cost 0.50 fish, as demonstrated here.

Opportunity Costs
A B
1 Fish=1 Meat 0.50 Fish=1 Meat
1 Meat=1 Fish 4 Meat=1 Fish

Thus, the lowest opportunity cost for producing Meat lies with B and for producing Fish lies with A, and thus they each have the comparative advantage for their respective goods.

A should produce Fish and B should produce Meat.

Here's a graphical example.

Let's say each country wants to devote half its resources to each item beforehand.

Fish Meat Total For This Nation
A 50 50 100
B 100 200 300
Total 150 250 400



Now let's say A produces solely Fish and B produces solely Meat.

Fish Meat Total For This Nation
A 100 0 100
B 0 400 400
Total 100 400 500

Total Units: 500

Specialization therefore increases the overall amount of goods produced, even if one country has an absolute advantage in all areas of production over the other. In the worst case scenario you will simply put more goods on the overall market without expending any additional resources. However, Greece actually does have some advantages in production, so you'll be even better off.

Errr...that's my Christmas gift to ye, an Econ lesson. Now begone, ya whippersnappers!
Buristan
26-12-2006, 00:23
...that's absolutely not true. The Law of Comparitive Advantage states that both sides will benefit as they will specialize. For example...

You have country A and country B. You have product Fish and product Meat, for a basic example. If they both focus all of their resources on Fish, A can produce 100 Fish and B can produce 200. Alternatively, if they focus on Meat, A can produce 100 Meat and B can produce 400. B thus has the absolute advantage in production.

So the basic logic seems to lead us to conclude that Country B should just produce for itself, because it can produce more, right?

WRONG.

We have to factor in something called opportunity cost. Opportunity cost is the benefit you could have derived from the next best possible use of the resource. So for example, the opportunity cost of studying for a test is not being able to attend a party. In this case, the cost for A is 1 Meat per 1 Fish and vice versa. But for B, it costs 0.50 Fish to produce one Meat, and two Meat to produce one Fish. Thus, we have to find the option that causes the smallest opportunity cost. In this case, B producing Meat would only cost 0.50 fish, as demonstrated here.

Opportunity Costs
A B
1 Fish=1 Meat 0.50 Fish=1 Meat
1 Meat=1 Fish 4 Meat=1 Fish

Thus, the lowest opportunity cost for producing Meat lies with B and for producing Fish lies with A, and thus they each have the comparative advantage for their respective goods.

A should produce Fish and B should produce Meat.

Here's a graphical example.

Let's say each country wants to devote half its resources to each item beforehand.

Fish Meat Total For This Nation
A 50 50 100
B 100 200 300
Total 150 250 400



Now let's say A produces solely Fish and B produces solely Meat.

Fish Meat Total For This Nation
A 100 0 100
B 0 400 400
Total 100 400 500

Total Units: 500

Specialization therefore increases the overall amount of goods produced, even if one country has an absolute advantage in all areas of production over the other. In the worst case scenario you will simply put more goods on the overall market without expending any additional resources. However, Greece actually does have some advantages in production, so you'll be even better off.

Errr...that's my Christmas gift to ye, an Econ lesson. Now begone, ya whippersnappers!

I had never heard of comparitive advantage before today, it was a good lesson.
Buristan
01-01-2007, 02:31
bump