Incorrect Inflation Model
Posted: Nov 21 2005
What is inflation but an increase in consumer prices? There is inflation for the cost to produce goods and services but it just feeds consumer inflation. SR2010 does not model inflation properly. It seems to be tied too directly to unemployment and that's not the whole story.
It's a shame that the game contains the perfect vehicle for controlling inflation - those wonderful commerce pages that show all the commodities and allows you to change efficiency investment and domestic price markup. That domestic price markup is basically your CPI - consumer price index. It bascially gives players government price controls for commodities. If one raises domestic price markup that should cause inflation, especially if one jacks it up from 20% or 35% to 49% on all products. The PPI - producer price index - is modeled by the production efficiency and as efficiency decreases producer prices increase and that also increases consumer prices even though the domestic markup remains the same. Once again you should get inflation.
It's sad that so many are so fooled by the siren song of supply-side economics. The braindead child of Laffer it is euphemistcially called "trickle down economics" but in fact it is nothing but "piss on us economics". Just ask the million plus Americans who slid into poverty last year thanks to the fallacy of tax cuts for the rich and greedy. Just look at the legacy of those tax cuts so touted for pumping up our economy falsely. Despite record low interest rates, record deficit financing, and those tax cuts that so fallaciously are supposed to drive our economy we only saw a wimpy 3.5% to 4.0% growth of our economy. Meanwhile inflation did not rear it's ugly head even though we experienced steady job growth as we came out of the 9/11 recession.
The reason that all of that inflationary action did not raise inflation is because tax cuts for the rich and greedy do not get spent, they get hoarded. Tax cuts given to the poor and middle class get spent and drive the economy and cause inflationary pressures as demand increases. Please do not be mislead by the siren song of supply side economics, it is not what it is cracked up to be because it is meant only to benefit the rich and greedy. Just look at how the rich and greedy in our country get richer while the poor and needy get more numerous to see the true fallacy of supply side economics.
Just look at the war on drugs to see how false supply side economics is. It has been fought for over 30 years by trying to kill supply. It hasn't worked and will never work because of one simple and undeniable economic fact - supply always rises to meet demand. As long as there's demand for drugs there will always be supply as enterprising entrpreneurs know they can make a buck supplying drugs.
Please fix the economic model to more properly reflect inflation. It is not just tied to unemployment, which can reduce demand and therefore prices, because there are other factors at work here. Inflation in SR2010 must be tied more directly to the domestic markup and production efficiencies so that player's can affect inflation by raising or lowering consumer prices. You've given us great tools for inflation modeling but you haven't really understood how to make them work properly yet.
Thanks,
Eric Larsen
It's a shame that the game contains the perfect vehicle for controlling inflation - those wonderful commerce pages that show all the commodities and allows you to change efficiency investment and domestic price markup. That domestic price markup is basically your CPI - consumer price index. It bascially gives players government price controls for commodities. If one raises domestic price markup that should cause inflation, especially if one jacks it up from 20% or 35% to 49% on all products. The PPI - producer price index - is modeled by the production efficiency and as efficiency decreases producer prices increase and that also increases consumer prices even though the domestic markup remains the same. Once again you should get inflation.
It's sad that so many are so fooled by the siren song of supply-side economics. The braindead child of Laffer it is euphemistcially called "trickle down economics" but in fact it is nothing but "piss on us economics". Just ask the million plus Americans who slid into poverty last year thanks to the fallacy of tax cuts for the rich and greedy. Just look at the legacy of those tax cuts so touted for pumping up our economy falsely. Despite record low interest rates, record deficit financing, and those tax cuts that so fallaciously are supposed to drive our economy we only saw a wimpy 3.5% to 4.0% growth of our economy. Meanwhile inflation did not rear it's ugly head even though we experienced steady job growth as we came out of the 9/11 recession.
The reason that all of that inflationary action did not raise inflation is because tax cuts for the rich and greedy do not get spent, they get hoarded. Tax cuts given to the poor and middle class get spent and drive the economy and cause inflationary pressures as demand increases. Please do not be mislead by the siren song of supply side economics, it is not what it is cracked up to be because it is meant only to benefit the rich and greedy. Just look at how the rich and greedy in our country get richer while the poor and needy get more numerous to see the true fallacy of supply side economics.
Just look at the war on drugs to see how false supply side economics is. It has been fought for over 30 years by trying to kill supply. It hasn't worked and will never work because of one simple and undeniable economic fact - supply always rises to meet demand. As long as there's demand for drugs there will always be supply as enterprising entrpreneurs know they can make a buck supplying drugs.
Please fix the economic model to more properly reflect inflation. It is not just tied to unemployment, which can reduce demand and therefore prices, because there are other factors at work here. Inflation in SR2010 must be tied more directly to the domestic markup and production efficiencies so that player's can affect inflation by raising or lowering consumer prices. You've given us great tools for inflation modeling but you haven't really understood how to make them work properly yet.
Thanks,
Eric Larsen