How do Bonds work in Victoria?

[unmerged(41229)]

I've noticed on my income screen for my budget that there is a section for bonds. It always seems to be at zero though...what I really want to know is what can I do to encourage investment in state bonds? Is it simply that I have to increase the expendible income of my people?

 

[SecondReich]

I have never ever gotten one single bond in over a year of Victoria. I suck at economy.

 

[unmerged(32689)]

hahaha "Is it simply that I have to increase the expendible income of my people?" that means we have to lower the taxes, witch will be an immoral decision for me.
But seriously ive seen some weird stuff happen, when you lower taxes so that could just work, not emediatly but in a long run. and that "trust in tre goverment" may be part of it so how.

 

[oxmonsta]

Your POPs just need to be earning a bucketload of income and have lots of spare cash for you to get state bond income. This means being heavily industrialised. Tank factories help, because they are insanely profitable. Even then, state bonds will only ever be the icing on the cake, not your main source of income.

 

[SecondReich]

Does anyone know the deal with this though? All my people need liquor, so I build two huge liquor factories. Still, no one can buy any liquor, which doesn't make sense, because at the rate I am producing it, it should be like worth 5 cents a bottle.

This is early in the game, and my taxes are 49% on all classes, full tariff.

 

[unmerged(32689)]

maybe you have a drunk society, and they allways need more.

prises are always the same, adding levels to your liquor factory does not lower the prises, if you really want to make you POP's happy just lower the taxes and they'll just buy everything they need off the market.

My POPs are never happy, no matter what i do, so i just gaved up on that and tax the hell out of every one. and if they dont like it, then they can go to US. lol

 

[SecondReich]

So, the only way to make things affordable for people is to pull a tax cut? Hmmm...

 

[King]

If your pops are buysing state bonds then they have bought all the goods they can of the WM and have a cash surplus. Only the riches pops can affoard to do that. If your Pops are not buying a need (i.e. it's red) and they have a cash reserves then it means that the item is not available to buy of the WM. POPs will only buy luxuary goods if they £100 in the bank. If they have no cash surplus then it could be that the item is available but they cannot affoard it.

 

[unmerged(36763)]

What I don't understand is how the state makes money on bonds. Bonds are essentially a loan with interest to the state. I cannot see how it would not be a net loss.

 

[tyrel68]

What I don't understand is how the state makes money on bonds. Bonds are essentially a loan with interest to the state. I cannot see how it would not be a net loss.

The way bonds work are as follows and this is in real life too:

1) Population has money
2) Population wants to invest
3) They choose the gov't to invest in
4) They buy gov't bonds
5) This means this money is available for the gov't to use
6) Only when the Population wants to cash out does the gov't lose the money

 

[unmerged(36763)]

That is all correct.

But in the long run, it is always a loss for the government*. Eventually, the government is going to have to pay back that money, plus interest. And in the game, the government makes money from taxes, tariffs, trade (land, claims or tech for cash), and peace treates, (WI for example). What income source is it re-paying those bonds with? So for gameplay purposes,
bonds in Vic are a little too abstract, which I think clashes with the generally concrete economic premises of the model.

*Unless they use the temporary profits to invest in something else, which does happen in Vic, but there is still no payback to even this out. In other words, net profit from bonds has to have large portion deducted in advance. Vic's bond profits are all absolute free money.

 

[tyrel68]

That is all correct.

But in the long run, it is always a loss for the government. Eventually, the government is going to have to pay back that money, plus interest. And in the game, the government makes money from taxes, tariffs, trade (land, claims or tech for cash), and peace treates, (WI for example). What income source is it re-paying those bonds with? So for gameplay purposes,
bonds in Vic are a little too abstract, which I think clashes with the generally concrete economic premises of the model.

ok...now I see where you are going. In this case yes you are right in that the abstraction overlooks that this is not free money.

 

[unmerged(36763)]

ok...now I see where you are going. In this case yes you are right in that the abstraction overlooks that this is not free money.

Yep, you posted this right after I thought I should re-edit my post for clarity, so you understood me all along. That is basically how I see it, bonds are like pennies from heaven, there isn't a give and take. Not that free money is bad for the player, but it is a feature I could have done w/o because the economic model is complex and good enough without it.

 

[tyrel68]

Yep, you posted this right after I thought I should re-edit my post for clarity, so you understood me all along. That is basically how I see it, bonds are like pennies from heaven, there isn't a give and take. Not that free money is bad for the player, but it is a feature I could have done w/o because the economic model is complex and good enough without it.

The funny thing is that once 1.04 patches up the economy, we should be getting much more free money as POP's should be able to sustain themselves and buy more bonds

 

[unmerged(36763)]

I actually thought that managing POPs needs within their income could often be a challenging aspect of Vic. This is because it makes them mad if they are broke, which makes sense. Sometimes, with high CON, POPs seem to get made for no good reason, whereas being broke is a legitimate complaint.

 

[tyrel68]

I actually thought that managing POPs needs within their income could often be a challenging aspect of Vic. This is because it makes them mad if they are broke, which makes sense. Sometimes, with high CON, POPs seem to get made for no good reason, whereas being broke is a legitimate complaint.

Very true but the major issue was the fact that RGO's were not producing what they should and the WM did not therefore have the goods on it to be bought.

Now I have no concrete info BUT the RGO emptying should be an issue to be addressed on the patch. This would in turn fix so many other secondary issues that it's really mindblowing.

 

[unmerged(36763)]

Well, that is cool, but I hope that that does not make the WM flooded with resources. And if it does, it means the player can sort of take advantage of the AI by not doing their own RGOs and simply importing.

 

[unmerged(32689)]

wow i got $3.00 of state bond. it raises and falls. if they fix the POP's needs bug. then i would probably get more.

 

[tyrel68]

Well, that is cool, but I hope that that does not make the WM flooded with resources. And if it does, it means the player can sort of take advantage of the AI by not doing their own RGOs and simply importing.

I am sure they will tone down the RGO's if that is the case ....I never thought I would have to say that :wacko:

 

[Stolen Rutters]

I wonder how bonds worked in the 1800s. Today the "canned" justification a government uses for borrowing the money is two-fold - that the government pays interest but pays it from future value money, or FV, (which is worth less than PV, or present value, since currency has been predictably inflationary for so many generations now), and secondly, that the money will be spent on things that will "improve" the economy long term, making the tax base larger and thus more able to afford paying back bonds at maturity.

However, I read that for very long time periods in the 1800s, currency (at least the USA currency) was more or less deflationary (which was credited to the amazing efficiency benefits gained from the growth and advancement of railroad systems throughout the land), which undercuts the FV argument, if not the growing economy argument.

... Of course, not knowing how European debt and currency markets trended back then (which most certainly were much more important on a global basis than the US markets, anyway) the rules could have been different. They don't really teach us Americans much about economics in school, so I guess we wouldn't know much about 19th century foreign debt practices either. At least we can check the Wiki or Google for some opinions and summaries about the subject.