if you want to expand your depression to a catastrophic level and steal the wealth at a greater rate, you must include these other key ingredients.
Create Government Borrowing
Government borrowing will cause a depression. It is both a historical and mathematical fact and an ingredient you absolutely want to incorporate into your recipe. Get your government to borrow and you will be able to steal more wealth and do it in a manner in which the people will not know or feel that they are getting taxed as much. Use this as a tool for when you see your citizens becoming uncomfortable with paying higher taxes. Government borrowing is a concept that will guarantee a national depression. It will serve to increase the level of wealth that you can extract from your current citizens while at the same time extracting the wealth from the unborn future generations. Borrowing will allow you the ability to financially enslave an entire society that hasn’t even arrived yet.
If you implement this ingredient correctly, it will enable you to borrow from your nation’s citizens and demand that your citizens be responsible for paying themselves back with interest. Isn’t that great? Think about it. You go to a friend and ask to borrow a hundred dollars, you then tell your friend that he owes you a hundred dollars with interest so that you can pay him back. I know, stop laughing! People around you might catch on and we can’t have everyone doing this. There simply are not enough nations to go around. If our friend is ignorant enough to go for this, we can continue to borrow from him and have him pay himself back for those loans he made to us. We can continue this process with him until he simply runs out of money and suffers his own personal depression.
Once you incorporate borrowing into your nation’s economy, you can use it to balance the amount you tax from your people against the amount that you borrow from them. When you notice that your citizens are getting a little antsy over their tax burden, simply borrow more instead of raising taxes. They won’t notice this at first, because you will make payments using their money against what you borrowed from them in small increments and in effect put the debt burden off to a period in the future making their kids and future generations for years to come pay for it. Best case scenario, you can borrow money and only pay the interest on the money owed just simply raising your nation’s debt as you steal its future wealth.
If you can continue to drive your nation into debt and use the money borrowed to increase your own personal wealth (spend the borrowed money like you would in the tax section), then never pay that debt off, when your depression occurs it will become a huge win for you and your associates. However, you have to be careful. As the payments come due on the money your government borrows, you will either have to borrow more or tax more to pay back what you have borrowed. You can’t miss a payment because you will risk the tax-paying citizens catching on. If you lose the ability to borrow and tax more, than your nation will suffer a depression which may be premature if you haven’t thoroughly robbed them of all their future wealth.
The ideal situation would be to get your citizens to believe that debt is necessary for the nation to succeed and there may just be a slim chance that they won’t even require your government to get permission to borrow more and more money as time goes on. In that case, you can simply just run wild with stealing all of their future wealth very quickly. It would be prudent though to have patience and work things in a manner that will allow a certain portion of your citizens to continue to create wealth, so that there is more to steal in the long run. Look at the long term. Greed is good, but temper it with patience so you can maximize your greed.
To get started borrowing, your government will have to produce debt instruments (ways to borrow money from your citizens) to sell to the public that bear an interest rate at a level that will encourage your people to purchase them (lend your government their money).
For Example; some of the most notable forms of government borrowing would be how the United States of America borrows from its citizens. They use what is commonly referred to as both long and short term debt instruments such as Treasury bills or T-bills. They have used Savings Bonds and other methods along the way as well. They place an interest rate on these T-bills or government securities that will encourage their citizens to purchase them (lend them money) as an investment. When their government needs to borrow more money (because it can no longer tax without putting their political careers in peril), they simply raise the amount of money (interest rates) they are willing to pay their citizens in order to entice a greater number of people and corporations to lend them more money. Today, many investment firms, money market funds, retirement funds, hedge funds and private equity firms lend money to their government (purchase T-bills) as an investment when the government is offering a higher rate of return (interest rate) than they can get from a bank or other investment sources. Since their government only has three ways of generating revenue, taxing, borrowing or inflating, the government borrows from the wealth of its citizens with interest, and then either taxes or borrows from its citizens in order to pay themselves back. When they can’t tax or borrow the money they inflate it. In this case, they borrow from their citizens with interest and pay them back with dollars that are worth less than the ones they originally borrowed from them. Gotta love it!
You will have to attempt to strike a balance between how much you tax your citizens and how much you borrow. Between what you and your cohorts steal off the top coupled with stimulating your special interest groups to keep them going, holding off your great depression is a fine balancing act until you have stolen all the nation’s wealth. As you raise interest rates in order to borrow more, you risk that other businesses in the economy will lose the ability to borrow capital to keep their business going. This occurs when the banks they use cannot borrow money at a low enough interest rate so that they can turn around and lend it out to them and make a profit. If the banks cannot compete with the interest rates that your government is offering to borrow money from your citizens, this can and will cause your economy to slow and indeed suffer a depression. One most likely that will be premature to you stealing everything you can from the nation. There are some great regulations you can put in place that will allow you to raise interest rates so that your government can continue to borrow, while at the same time expanding the credit supply so that your banks can continue to lend. These regulations will ensure that there is enough credit available at the local banks allowing businesses to go into debt in order to produce, and it will allow your citizens to go further into debt in order to consume.
While the creation of currency out of thin air is one way of implementing inflation in your nation, you can also use the nationalized banking system to inflate the credit supply. As you steal the available wealth (the savings) from your nation, the expansion of credit will become imperative to keeping your nation producing and consuming giving you the ability to steal away the majority of their future wealth. As your nations current wealth is transferred to you and your cohorts, credit will be the only thing that will keep the nation going. Through your nationalized central banking system, you will be able to control the expansion of credit in your nation. This alone will allow you to steal beyond most peoples comprehension. It will allow you to steal any possible wealth from those that haven’t even been conceived yet well off into the future.
Once again, the American socialists mastered this technique and you should both study it and use it while creating your road to a great depression. The American socialist ensured consumer debt by creating a nifty trick in accounting called ”fractional reserving”. This is an area that you will want to pay close attention to, because this little trick will allow you to transfer your nations wealth in a very subtle and unique manner.
When the American socialist started to implement their plan, they were faced with a nation in which the banks operated on what was commonly referred to as “Sound Banking Practices”. It is important for you to understand what those are, so if you come across them you can take measures to stop them. Sound banking practices will prevent you from stealing the future wealth of your nation.
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