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There is a kingdom with a king and 1000 people living within it. The king has to pay for upkeep of the castle including wages for guards, cooks, servants, etc. The king also makes promises to it's citizens but also taxes their earnings. Now, in a normal kingdom they use gold and everything is handled in gold. Since it's impossible to make fake gold, if the king wants any money for himself he needs to keep his expenses lower than his earnings.
Now, however, there is a smart king. The king has hired a minter. The minter takes copper, and imprints a picture of the king on it. Copper is so cheap that he basically has an unlimited supply. So what does the king do? He no longer accepts tax payments in gold. Instead, taxes must be paid in copper coins. This forces the citizens to turn in their gold and they begin to use it instead. Now, if the king wants more money, all he has to do is print more money and devalue it. However, he has smart peons, so they insist that they are able to get the same amount of gold as before. The king agrees and sets up a bank. Whenever the king needs more money, he has to borrow it from the bank. The king is the king, so the banker always gives it without any question usually with no interest or very little attached.
Then there is a war, the king borrows a lot of money to pay for soldiers, but he wins the war. By now however, the king is in huge amounts of debt and is reaching the limit he had earlier. Also, because of the amount of money the king introduced into his kingdom, the price of everything has doubled also causing his expenses to increase. The king says, don't worry, I will just raise the amount of money i can borrow. Eventually this wears off and the king says "Ok, I will sell you the gold back, but only to the highest bidders." This temporarily solves the debt problem, however, you can no longer trade copper for gold.
Now this seems all nice and dandy, but little does he know that he caused the savings of all of his peons to be cut in half. Over time, the king borrows more and more money to pay for new obligations to keep his citizens happy. He throws lavish partys and provides services like doctors, elderly care, and schooling. Without his knowing though, citizens begin to become poorer. Since it's almost impossible to keep up with the amount of money being added into the system, The average savings drops. Because of increasing prices, the citizens have also had to borrow money. In fact, it seems like the entire kingdom is in debt. To solve the problem there are 2 solutions. The king can either say "No, I'm going to stop spending money and pay back what I owe" or "No, i'm just going to borrow more money regardless of the effects".
What is the solution for this poor king and kingdom?
 
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What was your inspiration for this blog heh?
Also, are you asking us to choose between the two solutions, or to postulate our own? o_o
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On July 19 2011 07:44 Z3kk wrote:
What was your inspiration for this blog heh?
Also, are you asking us to choose between the two solutions, or to postulate our own? o_o
If you have another solution that is amazing, please say it.
It's obviously an analogy of the current financial situation of the United States beginning in the early 1900's.
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Smoke weed. Worry later 
+ Show Spoiler +Is this a metaphor for America, by the way?
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On July 19 2011 07:44 darmousseh wrote:Show nested quote +On July 19 2011 07:44 Z3kk wrote:
What was your inspiration for this blog heh?
Also, are you asking us to choose between the two solutions, or to postulate our own? o_o If you have another solution that is amazing, please say it. It's obviously an analogy of the current financial situation of the United States beginning in the early 1900's.
I was just wondering as to what prompted you to post this allegory, sorry.
I don't have a solution, but here's hoping for some interesting responses.
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On July 19 2011 07:45 masami.sc wrote:Smoke weed. Worry later + Show Spoiler +Is this a metaphor for America, by the way?
Following the advice of Sir masami the high, the king smokes weed and a riot ensues. The king is found buried in a river 5 miles south.
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On July 19 2011 07:48 Z3kk wrote:Show nested quote +On July 19 2011 07:44 darmousseh wrote:On July 19 2011 07:44 Z3kk wrote:
What was your inspiration for this blog heh?
Also, are you asking us to choose between the two solutions, or to postulate our own? o_o If you have another solution that is amazing, please say it. It's obviously an analogy of the current financial situation of the United States beginning in the early 1900's. I was just wondering as to what prompted you to post this allegory, sorry. I don't have a solution, but here's hoping for some interesting responses.
To gauge people's thoughts on the current debt ceiling problem, but to present it in a way which removes the complexity of the situation by using a simple analogy.
edit; A lot of policitians get hung up on the small problems like "How are we going to pay social security" instead of identifying the core issue. I don't care what you think about the debt ceiling limit coming up soon, but of the debt ceiling limit as a whole. Even if we pass this it will happen again in 6 months.
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What if the king could acquire more money in a manner similar to previous kings by repealing previous tax cuts for the richest citizens of the kingdom?
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On July 19 2011 07:52 n.DieJokes wrote:
What if the king could acquire more money in a manner similar to previous kings by repealing previous tax cuts for the richest citizens of the kingdom?
The king follows the advice of diejokes and is able to temporarily solve the issue, the king however comes back 6 months later and presents the same problem.
Cutting back a small portion of the budget doesn't work. We need massive reform.
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shouldn't the answer be a bit of both? maybe this is naive but it can't be that clear cut...
if he stops borrowing completely.. it's reasonable to say that the government will be in a horrible situation and perhaps not be about to function, but if he says he's just going to keep borrowing then it's just going to get worse...
wouldn't the reasonable thing to do be to be able to borrow more in order to function but use that money to reform broken systems and look for any resonable place to cut
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On July 19 2011 07:52 n.DieJokes wrote:
What if the king could acquire more money in a manner similar to previous kings by repealing previous tax cuts for the richest citizens of the kingdom?
Then the richest will move to another kingdom? (or move their businesses there at the very least?)_
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Here is a cool little simulator which helps you create a financial solution by cutting certain programs. This is a solution, but remember, you gotta convince the peons of your plan.
http://crfb.org/stabilizethedebt/
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He presses the reset button.
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Looks like town goes bankrupt, Mafia wins, we start signups for next game.
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On July 19 2011 08:16 Lemonwalrus wrote:
Looks like town goes bankrupt, Mafia wins, we start signups for next game.
Hahaha, i can always count on you guys to give the most appropriate responses.
Maybe I should come back to the mafia forums. I've been playing too much on epicmafia.com.
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Kill peons, let them starve or start a new war.
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I used that simulator you posted and cut defense spending and raised taxes on the rich and I balanced that mother fucker easily.
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5003 Posts
your scenario fails when you assume that the king has any power
it's really the various ministers who are fighting with each other to make decisions that will satisfy their party and refusing to compromise
the king is a puppet
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On July 19 2011 09:16 Milkis wrote:
your scenario fails when you assume that the king has any power
it's really the various ministers who are fighting with each other to make decisions that will satisfy their party and refusing to compromise
the king is a puppet
Dun dun dun.
To be fair, it's an analogy, so by "king" he may be referring not to the president but to the collective body that's assumed to be capable of making the decision/change.
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This metaphor is pretty weak, since the "King" isn't swapping personalities, ministers and advisors roughly every 4 years.
You've also ignored the merchants.
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EPT
