Debt in WWIII

Discussion of the Economic Model in SR2010

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felinis
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Debt in WWIII

Post by felinis »

When the game is about to start, I am told that the U.S. has a debt of 3 trillion dollars and a treasury of 6.7 billion..

When the game actually starts, I have 0 debt with 10 billion in he treasury, no bond outstanding.
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tkobo
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Post by tkobo »

Yup, and even odder the nations dont seem to accrue debt in this scenario either.
I have a game thats like 30 years in, and all the surviving nations show negative income,but none of them show any debt accrued by bond buying.
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Post by Il Duce »

Yep - in ww3 you see news items [but not greentext] indicating bond issuances by AI regions.... But this is not available to human players. I suppose this is about as close to an AI cheat as you could get. On the other hand, I let it go since the poor AIs can't build a factory or a base. so it seems almost fair in a way. Besides, if they don't have access to cash how can they buy my stuff and keep me afloat?
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Not my Imagination

Post by Eric Larsen »

I was putzing around with the WW3 scenario and after letting the game run for a few months I noticed none of the AI's had any regional debt yet there were reports of them borrowing. Looks like some kind of bug in the scenario design as I did see the US gain some debt in the World scenario but it always paid it back the next day. I'm wondering if the AI's are giving each other money to avoid debt or if it's a scenario design bug?
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tkobo
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Post by tkobo »

I could be very wrong on this, but i "think" its kinda of a design issue that causes bugs.

Becuase you buy bonds from the WM.BUT there is NO WM in the ww3 scenario.So theres no one to buy the bonds from in it.
BUT perhaps the AI doesnt know this and tries to buy them anyway, hence the messages.
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Eric Larsen
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Watch the Money

Post by Eric Larsen »

tkobo,
I watched very carefully and saw that the regions that report borrowing actually get the money and they seem to pay it back about as fast as they borrow it now.

Good point you made regarding no WM in the World-level scenarios. Before 4.61 the AI's were borrowing money hand over fist and racking up some huge debt burdens. Even when I ran the World scenario for a while to watch the borrowing it sure seemed to pale in comparison to before 4.61 and yet 4.61 claims no fixes to debt.

Anyway you made a good point about why should there be borrowing on the World level when there is no WM. I sure hope that in SR2020 they get the world level correct and get the WM out of the World level scenarios completely. Borrowing on the World level ought to be as loans from other regions not as bonds.
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Balthagor
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Post by Balthagor »

Before I make this comments, remember, I personally know very little about economics. The military stuff is my specialty...

I've fairly certain that bonds make you money because you sell them to your population, not others. I believe that is the root concept of bonds. I remember as a kid my parents buying me Canada Savings Bonds. They are just a form of GIC. IIRC...

I also think that a game decision was made to remove all starting debt from all players on the World and WWIII scenarios. I don't remeber why, wasn't something I was really involved in deciding.
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Post by Il Duce »

The starting debt for all campaigns was left out on one of the earlier releases, and then reintroduced in update 5 I believe. It was actually a bit burdensome and arbitrary [IMO]. Given the 'hypothetical/sketch' nature of the economics, I never saw the point in the initial debt positions - and they were always substantial. Just an opinion, don't get mad. For me, they basically made most of the China scenarios unplayable [given the high bellis and low treaty integrity ratings as well as the outrageous debts] so, I gave up all hope of ever playing the China scenario - which was a shame, because it looked like a lot of fun. I tried a few of the regions but I realized that it would be [realtime] weeks of micromanagement and threats until I could get anything accomplished.
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tkobo
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Post by tkobo »

Well, it was discovered while we (the forum) we looking at the WM and its affects, that you couldnt buy or sell bonds if you were NOT in the WM and of good standing.

Why would the WM have any effect on whether or not we could buy/sell bonds if they were not the ones buying ?
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Post by Balthagor »

tkobo wrote:...Why would the WM have any effect on whether or not we could buy/sell bonds if they were not the ones buying ?
It shouldn't, as long as my comment is right, remember that I stated my lack of precise knowledge in this entire subject.
tkobo wrote:...you couldnt buy or sell bonds if you were NOT in the WM...
I'm pretty sure that would be a bug, but I don't remember hearing about it. Current plans have us replacing the World Market with something else (no, I can't give the details yet :P) so it's unlikely that we won't at least be looking at this area for SR2020
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tkobo
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Post by tkobo »

Hheheh, no problem.

Im just very curious on this.

WM rating also decided the interest rate of bonds.Which again, wouldnt make much sense if they werent buying them.

Perhaps poke George a little, sometime in the future (ya know, with all that spare time you guys got) on this topic, for sr2010.
I would really be curious to hear a conclusive answer.
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George Geczy
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Post by George Geczy »

Well, I wish I could provide a conclusive answer, but (to quote the illustrious words of former President Reagan) "I don't remember".

As Chris mentioned above, one of the concepts of bonds is that they were between a region and the so-called 'Financial community', which at lower levels was fronted by the WM. At the world level, the 'financial community' should still exist, and bonds should be allowed. However, there could still be bugs in that area that we may have missed, or maybe I don't remember it all correctly.

This stuff is being redone for SR2020, so there will be more consistency. But we will still keep the separate concept of 'bonds' being debt not owed to a specific region (as bonds and Tbills are in real life), while region-to-region loans will hopefully take a bigger role.

But with specific regard to the WWIII scenario, I don't recall what issues went into that.

PS - regarding the lack of funds in scenarios like the China mentioned above, you can always start the game with custom options to increase the initial funds, to make up for the starting debt etc.

-- George.
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