The booklet of Economics
Alot of people ask alot of questions about economics. Thus I wanted to make an easy to understand post that deals with the finance department. For the sake of simplicity we'll assume we plan to increase taxes and social spending along with domestic markups to see what their effects will be.

Chapter 1
Income

Taxes

DAR (domestic approval rating) affects your tax income. If your DAR goes down, you will gain less money because people would rather commit tax fraud than pay you.


Low income: this is the majority of the population. Effects:

++ Tax income
---- demand for products

High income: this is the elite 1% of the population

++++ tax income
-- demand for products

Corporation: Big companies who produce alot of goods

++ product cost to manufacture
+++ income tax

Small business: small retail

Mom and dad store who sell commodities

*this here is a special meantion, I observed that not only will cost of goods to manufacture will increase but it will also lower demand of goods*

++ income tax
+ product cost to manufacture
- demand for goods

Sales tax: self explanatory

++ income tax
-- demand

Unemployment, property and pension are very lower spectrum taxes. Effects are very negative if you use these taxes. Not worth the DAR hit.

.

Chapter 2

Social spending

Healthcare: hospitals and stuff. Raises birth rate and lowers deaths. Good DAR.

++ births
-- deaths
+ DAR

Education: schools and universities. Increases literacy, research eff, good DAR

+ research eff
++++ literacy
+ DAR

Infrastructure: this is a money maker, increases production of everything and expands supply ranges. I personally always keep this maxed out.

+++ production
+++ supply ranges
++ maintenance cost

Environment: Hippy green stuff.

+ tourism
+DAR

Law enforcement: boys in blue keeping the nation safe. Decreases chances of partisans spawning and big DAR boost

++ DAR
-- chance of partisans appearing

Cultural : same as above with an international boost to relations

Family subsidy: increases birthrates. That's it

++ birth rates
+ DAR

Social assistance: increases gdp more than the others and HUGE DAR boost

+ gdp
+++ DAR

Chapter 3

What should I do?

It depends on your situation! Here is 2 scenarios and different solutions to the issues so that you can see how to apply them.

I have alot of surplus goods I sell on the world market. My tax income keeps decreasing its at 45% ish across the board and my social spending increases!!! What do I do???

Solution 1

Lower taxes (crazy I know) for the lower income folk, to 20-25% , cut small biz taxes as well and keep sales tax at only 10%. Kill off family subsidy (reduce birthrate) to 1% or less (always keeping a small % gives a boost to DAR), lower healthcare as well. Increase education (assuming you have infra spending maxxed out) bump up social services or keep at same level. Raise enviroment and law enforcement if possible.

Effects so far? People have more money to spend, births have been halved, DAR has increased or stayed about the same ish. Now for the big money maker...

Go to the production tab, tweak the goods domestic prices to match demand (a good idea is to have a surplus of 20% being left over for consumer goods, so you can stockpile and trade at will)

Common reactions.

I am doing about the same or worse than before! Except now i have less goods to sell!!!

Give it 1-3 months. You'll notice DAR will increase if you lowered the domestic prices for goods thus boosting your tax income!!!

Consider (depending on the circumstances) making 90day deals with countries for surplus goods such as consumer goods, industry, petrol and military. (Any good will do though)

Solution 2

Tax them all to death, take every single penny you can squeeze out of everyone. Keep law enforcement and infrastructure maxxed. Keep very minimal education, provide adequate cultural subsidy (propaganda) and some form of social assistance.

Next 200% on commodities, and anything profitable. Electricity and (highly suggested) food should be low as possible. If able make it free.

The desired effect should be oppression at its finest with an emphasis on exporting goods. *careful* if you sell too many goods to one nation and alianate the others not only will your prefered customer pay over 50% less when its time to renew the deal but other nations might not be so fond to make deals with you. Unless you're hurting for money, only supply them with what they need. Don't put them (favorite customer) in a position to re sell the extra stuff at retail price. Pick a few good ones and any surplus left (if any) stockpile or sell off on world market depending on your situation.

Why sell domestically and not internationally?

Simple... You have control over supply and demand while retaining your national power.

In other words lets take a look at this Scenario:

You are Nation Alpha, with 6 neighboring nations. You require FOOD and INDUSTRIAL GOODS. You have plenty of PETROL and MILITARY GOODS to sell.

You need:
FOOD & INDUSTRIAL GOODS
You have:
PETROL & MILITARY GOODS

The good news is that all the nearby nations require the resources you have a surplus of desperately. If you decide to go ahead and sell the goods to just one nation, you will swift the balance of power. The price for whatever good you just sold will increase in the world market and the nation you sold them too will then re-sell at a higher price. Not to mention that they will be able to stockpile these resources and give them the ability to wage war.

See now this is not a bad thing... You can set up wars and gain very high positive influence by supplying Military goods to nations who are not on very good terms with other nations. The moment they declare war, their cascius belli will increase and you can attack them, taking their land and resources in the process.

These are all things to consider...

Now if you were to sell domestically and suck it up.... Make petrol free in your nation, do not export anything (you can get away with selling 10% of your left over products without swifting the balance of power too much)
Increase food production and/or industrial goods . Why is industrial goods not a priority you ask? Simple, it goes ridiculously high in demand ONLY when you are trying to build infrastructure or repairing. Thus you can decide whether to SLOWLY build up your food infrastructure, make it a mid term goal by buying some on the side or make it a short term goal by outsourcing all your demand to other nations (avoid at all costs just picking one nation, balance of power...).
I cannot stress this enough, balance of power is important. Not to say that trading with only one nation is bad but in most cases you want to avoid it. Ofcourse you can also use it deviously.

Sell petrol and military goods for 2 years to a nation of your choosing. Watch them build a never ending army of machines and then cut them off... Do not sell them a single drop of oil or a gram of gunpowder. By next year you can declare war, entrench yourself, watch as all his machines of war use up all the petrol they stockpiled which will cause them to just stop moving... Watch as they use all those precious military goods to re-arm and repair...

So now you are wondering... I destroy everything and take the country?

**** no.... you do whatever it takes to go around them and leave their army as intact as possible. Target key industry targets likes food, petrol and military goods. Take them all and hold position or destroy them with Special forces. It matters not, just make sure they do not have access to them anymore.

Then take the capital, chances are they will surrender and you will be given all the land and a whole army which they paid for and you can now afford.

This is the power of economics and its utility in warfare.

To be continued....

Post thoughts and comments. Questions and corrections (if any) are more than welcome and are encouraged.

Unless you are RPing a benevolent utopia and you sre new allow me to introduce to you a great government .
Set all taxes to max except unemployment, pension and property.

Set all domestic prices to the max for resources which are profitable to export. Everything else at your own discreetion.

Then pump infrastructure to max, 100% quality for education and healthcare. Put family subsidy to a descreet level to encourage births. Everything else to minimum.

Bonus if you can set the food price to 0.

Here is a government that takes everything because the citizens need nothing. It will be viable for 10-20 years if not longer.