Archive:Andrew Hester/On the Economy October 2012

By Andrew Hester , Head of the Treasury , Sophomore Executive

October 19th, 2012

Been awhile since my last speech and with so much going on with recruiting new people such as Nathan Maine and Jackson Stoneman I'd like to give a little crash course on the Economy and how I feel the government fits into our economy. Firstly however, I'm not certified 100% in economics, right now however I am enrolled in Macroeconomics, the study of how governments and large businesses make and spend money in college. And I plan to have a major in economics, or another financial major that's out there.

Now, I am a strong believer and supporter of Laissez-Faire economics, however given the past in the United States economic history 100% no government intervention is **wrong**! Take the 1929 stock market crash of when in October, the bottom fell out on the New York Stock Exchange (NYSE) and billions of dollars were lost. The Hoover administration took the stance that there was "nothing the government could do." More like it was that there was nothing the government **wouldn't** do. The measure of a nation's economy is based on it's GDP, or Gross Domestic Product, is measured by this basic equation: *GDP=C+I+G+(X-M).* Where **C** stands for *Consumer Spending*, **I** standing for *Investments*, or gross investments without taking into account the investments to replace old machinery (such as those in a factory), **G** stands for *Government Spending*, **X** standing for *Exports* and **M** standing for *Imports*.

Now say that in the Triumvirate, Consumer spending was ∇1,700, Investments were ∇75 (due to not much to invest in, it's the lowest variable), Government spending was ∇531 and there were no Exports or Imports, due to noone else accepting Tri at this time but us, the Triumvirate would have a GDP of 2,306 in a year. Now, say that the following year consumer spending was ∇1,600, investing was ∇75, government spending was ∇531 and the Triumvirate Imported ∇250 and Exported ∇100. The new GDP would be 2,056 this would be an 10.84% drop in output (Output standing for Y). Now business treads have shown that when a nation experiences a recession businesses cut jobs to save on expenses and to stay in business, but this has the side effect of spreading the recession's damage. To reverse this consumers would have to increase their spending despite loosing there jobs, though this wouldn't be a sure thing as it could only be a minor save. The best course of action would be for the government to increase spending, or if there were some, lower taxes.

Back to the 1929 NYSE crash, Hoover told the people to spend more money... sure enough no one spent their money cause they were afraid that they wouldn't have an income later and would need something to fall back on causing the recession to increase in damage to cause the United States to suffer a 25% unemployment rate. President Hoover then told businesses to invest more money... however the businesses not having the revenues to spend didn't invest their money. So, in a last ditch effort Hoover raised tariffs on imported goods from other countries to aid American businesses... and well the side effect there was other countries putting high tariffs on American goods, this final act caused the Great Depression to spread around the world (as we learned in my Macroeconomics class). The key area Hoover absolutely refused to increase, was government spending. Though a government that want's a balanced budget is commendable, but there are certain times in which a deficit is good. After Franklin D. Roosevelt came into office as the 32nd President of the United States in 1933 and his *New Deal* Programs, with the new government spending under FDR the unemployment rate dropped. Though it took the Second World War to fully end the great depression in the United States, the New Deal Programs helped.

Next I'd like to talk about taxes, I agree with both Establishment Party member Arnold Ogamon, Chief Attorney and Progressive Party member Stavrok, Head of Commerce and Industry and Third Major Executive, and their stances on taxes. Ogamon believing in no taxes and Stavrok on wanting taxes... let me explain. Taxes are a government source of revenue, it helps governments build necessary infrastructure that benefits the lives of it's citizens, it's defense and sometimes it's culture and technology. With that, I say that at this time there should be **no** taxes of any kind, with only 21 active members in the Triumvirate and only four businesses, only two of which are in the over 500 Tri range in wealth, taxes would get in the way of more people joining and worse from starting new businesses. Plus as Head of the Treasury it's my job to make the government money and moniter it's assets, and right now the government has ∇1,760 and only spends 80 every trimester (20 to General Media and 60 to the Executive Security Agency) which equates to ∇240 a year... at this rate the government will be out in exactly 22 Trimesters (Seven years + one Trimester) again at current government spending trends since the Contract:Triumvirate-Corporate Corporation is now officially over.

Now Stavrok will argue that businesses like Ehyta's General Media and my Corporate Corporation take in huge sums of money and don't spend it... that's because we're not taking out salaries and also because we haven't hired anyone... and **both** businesses are in fact hiring people, it's just a matter of people applying. This would be unacceptable and unfair to tax businesses in the Triumvirate just because of our two businesses. Couple months ago, Stavrok attempted to get a 25% business tax passed in the Executive Branch, if there were like 50 members in the Triumvirate and/or ten or more businesses in the Triumvirate or the government needed a source of revenue I would have agreed to it. But 25% to only four businesses, one of which (First Nation Consulting) only has ∇50 and Schay Enterprises only has ∇190. These two businesses haven't had an income in months, if FNC was to receive money for a case they won would be ∇40 at a 25% tax they'd only get ∇30 for them that'd be alot but over time the ∇10 they loose would add up, plus when you consider FNC maybe gets a case once every two-four months at the moment, they're loosing substantial income, about ∇30-∇60 a year if that much.

The economy is a precise thing in our Triumvirate, it's an easy thing to both make prosperous... and easy thing to collapse, the Executive Branch has to walk a fine line implementing new changes to the economy, the policies it takes could either make or break the businesses in the Triumvirate... and those who work in the businesses...

Thank you for your time

Andrew.D.Hester (talk) 04:57, October 19, 2012 (UTC)