Following governor Hill’s order to the letter, official republic purchasing had faithfully matched, in every financial quarter, the government expenditure 1 of Earth nation, the United States of America.
Rethinking Republic Expenditure
The republic was slowing down. Hill decided an alternative approach to the republic’s official purchasing was needed. Existing huts and generators are old and inefficient. New huts and generators are a priority. Defences to rebuff the advances of ‘less than friendly’ others (if they ever arrive) will be updated. An infrastructure programme would be undertaken.
When to Trigger Programme Expenditure
The governor made a decision regarding purchasing and informed her officials. Republic purchasing on the first day of each financial quarter, she said, will from now on depend on aggregated consumer agent rating of government, as explained in the middle. If aggregate ‘disapproval’ of the government is equal to or greater than 55% of the consumer agent population, then official government expenditure will in the following quarter be increased by an amount that is between 20 to 25 percent (randomly decided) of the expenditure in the previous quarter.
An engineer before she was an astronaut, the governor understood the success of her programme was a question of distribution and productive capacity, that is, to whom spending on the real resources (labour, materials, energy) would be allocated. Also, she was aware that some members of the republic might have misgivings about the financial effects of a rising government deficit. To assuage concern, Hill needed to show the effect her ‘infrastructure boost’ expenditure programme would have on the government fiscal balance. Hill’s model demonstrated the economy would circumvent long-run fiscal balance exponential dynamics because:
- There is the ‘Dwelling Security & Protection’ tax (37% of all income).
- All consumer agent members pay the tax, without fail.
- Money supply is free of interest payments.
Outcomes (Actual and Forecast)
- Outcome 1 shows the money supply, actual and forecast, made available to the non-government agents of the republic.
- Outcome 2 shows aggregate consumer agent ‘disapproval’ ratings of the republic’s government.
See the outcomes. Right click link to open in new tab, if required.
Monetary System Evolution
Hill contemplated the future of her republic. Influential members were entertaining Hill this evening. Their topic of interest was a short-term safe store of value (other than cash), in effect, they would like a financial portfolio choice. Of course, the republic could broaden monetary system operations. But, with what effect to political economy?
Evening inevitably arrived. The eyes and faces all turned to Hill as she stepped into the room. Interesting times she thought.
Best plough on.
tenjinMacro by Melondata.
1 Total managed expenditure (quarterly) data source: U.S. Bureau of Economic Analysis, Government total expenditures [W068RCQ027SBEA], retrieved from FRED, Federal Reserve Bank of St. Louis - https://fred.stlouisfed.org/series/W068RCQ027SBEA, April 12, 2019.↩