Inflation & Economy Discussion

[Shiro]

On 6/6/2020 at 6:19 AM, changooman said:

I think the economy is fine as it is for the most part.

 

My only real concern is how the government is seemingly pumping millions in aid from subsidies out of thin air. 

The government is fucking loaded it seems, 5k paychecks when you arrive to the city, cops rolling around with loud supercharged cars pushing 600hp+, almost no taxes for anything. It's very weird to talk about anything related to government funding IC'ly because it's like they're just printing money and handing it out. Realistically speaking the government makes a massive loss every day, the state should've went bankrupt a long time ago.

[shiroq]

1 hour ago, Shiro said:

The government is fucking loaded it seems, 5k paychecks when you arrive to the city, cops rolling around with loud supercharged cars pushing 600hp+, almost no taxes for anything. It's very weird to talk about anything related to government funding IC'ly because it's like they're just printing money and handing it out. Realistically speaking the government makes a massive loss every day, the state should've went bankrupt a long time ago.

Not at all, you realise that the government owns businesses too? Barbers,clothing shops, dealerships all of that money goes to the government. The 200k that people get? That goes back to the government one way or another, they buy a car or a house (unless its from a player)

The biggest issue within the economy is people unwilling to spend money. Everyone buys a house for 100k and a car for 100-200k like it's nothing but when they go to a club they cry for days about how they got charged $600 to enter and 200-300 for a drink. I hate this mentality it's like we are in an mmo and everyone is hoarding wealth. It's unrealistic as shit. The night life on this server is boring because we don't have a "rich" group of friends dropping 5-10k on some fancy bottles sitting in the VIP. A small MINORITY of people purchase VIP entrances. We have criminals/civilians having millions in their bank accounts but when it comes to spending money unless its on an asset you can forget about it.
 

The mentality really needs to change on how people see money, when you go to a club irl you end up spending A LOT compared to what your income is and you definitively feel like you "wasted" money when you wake up the next day with a headache.

I fullly support an introduction of bills, taxes and whatever else. People who do not rp their wealth properly do not deserve to have their wealth.

This is a Roleplay server, act like it.

Edited June 17, 2020 by shiroq

[misTake]

6 minutes ago, shiroq said:

Not at all, you realise that the government owns businesses too? Barbers,clothing shops, dealerships all of that money goes to the government. The 200k that people get? That goes back to the government one way or another, they buy a car or a house (unless its from a player)

The biggest issue within the economy is people unwilling to spend money. Everyone buys a house for 100k and a car for 100-200k like it's nothing but when they go to a club they cry for days about how they got charged $600 to enter and 200-300 for a drink. I hate this mentality it's like we are in an mmo and everyone is hoarding wealth. It's unrealistic as shit. The night life on this server is boring because we don't have a "rich" group of friends dropping 5-10k on some fancy bottles sitting in the VIP. A small MINORITY of people purchase VIP entrances. We have criminals/civilians having millions in their bank accounts but when it comes to spending money unless its on an asset you can forget about it.
 

The mentality really needs to change on how people see money, when you go to a club irl you end up spending A LOT compared to what your income is and you definitively feel like you "wasted" money when you wake up the next day with a headache.

I fullly support an introduction of bills, taxes and whatever else. People who do not rp their wealth properly do not deserve to have their wealth.

This is a Roleplay server, act like it.

GTAW in one post. People that are young and rich should spend more money on stupid things, like expensive champagne and whatnot in the clubs, sane goes for everything else. I always leave a tip for bartenders and workers at gas station. 

[jcat]

2 hours ago, Shiro said:

Realistically speaking the government makes a massive loss every day, the state should've went bankrupt a long time ago.

 

Just like real life ;)  Keynesian economics ftw!!

[RoryR]

I like the idea of money sinks and have a few ideas for them. The first being taxes which a number of people have already touched on. I think these should primarily target the wealthier players in the form of taxes on high-end cars and houses/apartments. This would not only create a good money sink, but also stop people flipping houses and cars like they're nothing. Not really sure what other taxes would work well, a sales tax on all purchases would just get annoying and messy in my opinion. Unsure if this tax would be recurring, or perhaps paid when buying the item.

 

The second idea I had for the most part pretty much falls in line with what is discussed here. Making players need to eat and drink will force them to realistically contribute to the economy. I think for an initial system that particular suggestion goes a bit too hardcore. I think something simple like requiring your character to eat and drink once every 8 hours would be sufficient to start. Failing to do so would mean you'd lose 1 health every 5 minutes or so. To fulfil that requirement you would simply just eat 1 food item and drink 1 drink item. I think a nutrition system or food items of different value may over complicate things, at least to begin with. This would make 24/7s a lot more necessary and improve that particular RP. Also, are there big grocery store buildings around the map like Walmarts or something? I haven't noticed them but if there are that could bring a new grocery store business with a larger selection of food and drink items. You could then buy these items and store them in your house. For this I think it would be worth storing items in a seperate inventory such as in a fridge in order to not clutter the main property inventory. I think the food in 24/7s and (potentially) grocery stores should be significantly cheaper than restaraunts and cafes to encourage RP and business there, and it's also realistic. Overall though, it would have an increase of service RP across the board and create a good money sink.

 

I really like this idea because you can make it however complicated you want. Take it a step further and have hunger/thirst levels which food/drink items replenish, rather than simply fulfilling a requirement in a timeframe. Take it even further and have different replenishment values on those food/drink items. Take it even further again and implement expiry times on those items to encourage careful spending and punish food/drink waste.

 

Another good and relatively easy money sink would be to implement some more bills tied to properties. I think all properties should have a utilities (electricity, gas, water, internet) bill. Perhaps properties in wealthier areas could have additional fees such as gardener fees, or fees due to being in that neighbourhood (can't remember what they are called). These fees could scale with the size of the property and where applicable the neighbourhood it is in as well. Not a whole lot of complexity here but just feeds more money back into the economy. 

 

Something else I'm not sure if I've seen elsewhere would be a healthcare system. To focus more on the financial side of it, this would introduce health insurance which would be another recurring bill. The benefit of this would be that any health care expenses would be covered by your insurance. However, requiring medical treatment without health insurance would incur heavy costs. This adds some more reality to the server and another reasonable money sink.

 

One last idea would be an education/training system. I've seen some desire for a school to be implemented to the server, unsure if that is in the works or ever will be, but this would work well with that. It would introduce teachers and other school related jobs. Obviously minors wouldn't have to pay for school, but perhaps community colleges or universities if they were to ever be added would have costs. Also, for other jobs such as mechanics, barbers, truckers, etc. perhaps you would need to acquire a license/certificate which you would get from a training school. Players would at least need to pay for certification, but perhaps could also pay for training if they would want to RP being new to that specific trade. This could also introduce people RPing as trainees/apprentices and also experienced teachers of specific careers/jobs.

[Blöp]

 

[Midsummer Night's Dream]

12 hours ago, liafriuli said:

Spawning more money into the system just inflates the money. 

 

In theory, printing money and putting that money into circulation devalues the currency and causes inflation; that’s correct. However, the reality is much less straightforward than the theory. In practice, because there is no way for us to determine how much money is currently in circulation —  for instance,  virtually nobody would know that newly-minted money was put into circulation — this should not cause inflation.

 

As I have said on GTAW’s discord, a lot appraised goods or property are arbitrary and cannot be tied to whether the economy is inflated or not. 

 

In the real world, there are typically two ways of putting money into circulation: a central bank making an interest-rate drop, which — in theory — encourages people to borrow and spend more, rather than save or hoard. The second is through printing money and putting that money into circulation; typically, the central bank would do this and then put that money into circulation by lending it to private banks, which, in turn, lend to consumers. 
 

If a central bank wanted to put more money into circulation, it will — though by no means invariably — instead lower interest or lending rate to disincentivize consumers from hoarding their money in a savings account and, instead, encourage spending, i.e. increasing circulation, or the rate at which money changes hands.  This is typically the first and only resort, although, of course, recourse may be had to printing money. 

 

The consequence in the end is that more money in circulation with increased spending results, in theory, in higher demand for goods and services, which increases scarcity and, with it, the price for goods and services.

 

When there is a change of interest rate, which are what central banks typically use to manipulate inflation, the public announcement of the policy setting the rate means that suppliers of goods and services can anticipate when there will be a greater demand on goods and services.  The public announcement allows individuals to financially plan, and adjust their plans accordingly (i.e. save less and spend more; perhaps, take out a loan from a private bank’s reserves to embark on, for example, a home renovation). Put another way, a public announcement about interest-rate changes allows everyone to discern when they should expect there will be more money in circulation, and to act accordingly — at least in theory.

But again, the reality is not usually as straightforward. For instance: a central bank might print more money, inject that money into private lenders’ reserves (whether through securities purchases or lending), and then lower interest rates all in attempt to encourage people to take our loans, among other things, from those lenders and bring about a flurry of spending; but, in the end, people might still be reluctant to take out loans, or spend more, even with the rate cut and the stimulus in injecting more money. 
 

Here, we don’t have lending rates fixed by a central bank which buys securities from and lends funds to private lenders. There is also really no way for anyone to know when there’s been an increase of money in circulation; and so there’s no reliable and immediate way for sellers and suppliers to see a reason to raise the prices of their goods.  
 

Unless suppliers of goods and services can reliably see that there was an influx of cash injected into market for circulation, prices should not always increase.  One way they can try to see this is through taking note of increased spending in their business — in other words, increased demand for their goods — but that’s still a dubious gauge (because the reason for the increase spending/demand might be unrelated to newly-minted money entering circulation). Of course individuals might see their own paychecks or social benefits increase, which would — in theory — cause them to spend more. But again, that’s just in theory; people might, paradoxically, continue to save their money despite receiving more cash, as if nothing happened.  This kind of response — paradoxical though it may seem — might occur when there’s widespread anxiety during a crisis (for e.g. take the COVID-19 pandemic), particularly if there is widespread fear and anxiety which the government is unable to alleviate. And if consumers do continue to hold onto their cash, the rate of circulation does not change and so neither should the demand and price variables.

 

 To summarize, the reality is much more complicated than ‘more printing = higher inflation.’ In our system, and even in the real world, it’s very difficult to discern how much money is in circulation at any given point. The consequence — perhaps an uncomfortable to some — of this salient fact is that a lot of prices are arbitrary.

 

 

 

Edit: I should note that my comments don’t mention the other half of the equation: output. If output remains the same while money circulation, spending and demand all increase, this should result in scarcity and so inflation. But if output were to keep up with increased demand caused by increased circulation and spending, there should be minimal to no inflation.
 

Hypothetically, if the government injected a lot of cash and distributed the cash not just to consumers but to manufacturers too, allowing them to undertake capital spending and increasing their manufacturing output quickly — with turnover and upgrading in record time — then those manufacturers should be able to keep up with increased consumer demand from the market and, consequently, keep scarcity and inflation at bay.  

 

(As an aside: relying on human workers to keep up with an increase in demand might be difficult, but, perhaps, this will be easier with automation — even then, robots have their limitations too!)

 

Edited June 18, 2020 by Midsummer Night's Dream

[Webb]

money sinks would only make sense if you play GTAW 24/7, You are not alive all hours in the game. So therefor a Utility bill based on OOC time does not make sense unless you want to force activity.

 

I lost over 1 million in house asset from taking a week or two off.

[jcat]

Just now, Webb said:

I lost over 1 million in house asset from taking a week or two off.

 

Seriously.  

[Webb]

Just now, jcat said:

 

Seriously.  

Yes