Reduce deficit and raise GDP

[TuxJr615]

I'm having a hard time cutting the deficit and keeping the eceonomy in the game healthy. Both spending cuts and tax increases (both integral to reducing the debt) only hurt the economy overall. With unemployment going up and GDP going down, the government loses revenue and the deficit gets bigger. Then the credit rating is downgraded and the economy gets worse. This is a vicious cycle and I have no clue how to fix it. Does anyone have any ideas?

[Doug_Dimmadome]

I've begun to realize the underlying message of this game. We're screwed. There is no balance that makes a healthy growth. We're fooling ourselves, things only get worse no matter what we do.

[Bobbert]

Getting high GDP isn't that hard; Smal business grants, education progammes, atheistic schools, pro employer work layws.. Doesn't cost very much and raises production and so GDP.
Take a small tax raise to pay for it and your done.

Mayby you're already in the dead zone (too much spending on interest), then I suggest to restart.

[axios2006]

First step: open gpd and search "red" causes.

[Prydzen ᛋᛟ]

samurai_gin, actually the game teaches it is very easy to to raise gdp when you use logic. but there are a few logic flaws in this game though.

[Doug_Dimmadome]

@Bobbert Except then you'll piss off a lot of voters and end up not getting relected.

[Prydzen ᛋᛟ]

thats why you put the grants on low.

[Doug_Dimmadome]

Small business grants, lowered capital gians taxes and corp taxes, went full pro-employer. Increased income tax by a percent to make up for deficit. GDP went up for about 2 turns, then randomly dropped. Credit downgraded, money started being lost, and all hell broke loose with the voters.

Yay.

[Life Pilgrim]

Fighting budget deficit is a RACE against time. It is best to tackle it as eaarly as possible. If you get to the point of cutting spendings and raising taxes you're finished. The GDP will only get worse.

To reduce deficit or better to avoid it raise the GDP as early as possible. Invest in education and technological pursuits. These are capital for economic growth. At the same time give leeway to Capitalists to want to invest and open business or live in your country. Also help small business or make it easy for people to open new ones. Give them tax breaks, tax shelters(though this is unethical in RL) and or even lower Corporation tax. Investments in education and technology take considerable time so need to be prepared with waiting until the effect is felt.


PS I'm no RL expert just that that's my IN-GAME advice ;)

[ZombieHunter]

If you want to get out of a deficit situation you must cut funding in the most influential areas to have much of an impact. Instead of messing around with the lower tier expenditures you cut the higher tier ones.

This does not bode well for your voters though b/c the top expenditures are also usually the most important issues with them.

However, if you take the approach to cut lower tier expenditures you will have to cut many many of them before you make a dent in your deficit and will likely anger a greater cross section of voters which also is not good.

If I'm in deficit I cut military spending and state pensions quickly. These are heavy hitters and you can appease the voters later in your term if you cut them early. After that you can implement some of the policies that have been mentioned in this thread and things usually work out generaly well.

[Dallas]

There are certain things to absolutely avoid for certain countries.
For instance America is totally dependant on it's HUGE military spending.
I have not yet been able to ween America off it's army without causing a total crash.

[Doug_Dimmadome]

How realistic.

[ZombieHunter]

You can drop the military spending in the US but you must do it gradually. Time heals all wounds and this is very true in this game and I suspect in the real world of politics. We see this when a President, Senator or Representative claims they will not raise taxes for a specific program to be implemented. The program gets implemented and 3 years later they find it is not sustainable and thus they raise taxes. Most people will have forgotten the promise made 3 years ago about not raising taxes and eventually the taxes will be raised. Politicians are keenly aware of this strategy and they use it often.

Be assured when a politician says they will not do something it usually means they will not do it now....but eventually they will.

Cut military spending slowly and gradually and you should be able to get away with it. If you cut it from overhwhelming force to defensive only then you will probably find yourself flipping hamburgers after the next election. You can also cut spending by slowly increasing and decreasing it at the same time. This is like playing a slot machine at a casino. It looks like you are winning but you are really losing while winning. If you were to plot out on a graph your winnings vs your on-hand cash you would find a gradual stair step down until you have zero cash left.

[Prydzen ᛋᛟ]

You can cut military spending but if you cut too much you risk invasions.

[Doug_Dimmadome]

....invasions....?

[{HG} Whightwolf]

You need to invest in your fundementals, let the debt rise and GDP fall so long as your money is hammering into transport links, health, education, science your fundementals. Then when they start to come on stream you should be free to work on slashing the debt. Ideally with taxes on cigurettes and booze as they sap productivity.