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Terrestrial Liability #168
88 Badges
Mar 17, 2001
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Bankruptcy works really weirdly right now. The consequence of defaulting should be not being able to borrow money, and having economic crises, not having troops with low morale for a decade. Here's an idea for a revised model for loans and bankruptcies.

Your nation should have a borrowing limit. This represents how much money people are willing to lend to your nation. This borrowing limit should be affected by 1) total development, 2) credit rating, 3) interest rate, and 4) advances in financial innovations (as modifiers). Instead of having loan size, you should be able to borrow any amount you want up to the borrowing limit, and each loan will automatically be paid off over some timespan (say 50 years). Your credit rating represents how well you have paid back existing debt, and should slowly tick up as long as you are successfully paying off debt. It should crash if you default on your debts.

What you can manipulate is the "interest rate", which is how much interest you are willing to pay on all the debt your country borrowed. To make things simpler, all your debt should have the same interest rate. If you want to raise the borrowing limit, you can raise the interest rate, which then also makes all your existing debts more expensive to pay off. Alternatively, you can save money by lowering the interest rate, which then proportionately reduces the amount of money you can borrow.

Instead of bankruptcy, you can decide to default on some or all of your debt. This will crash your credit rating, but also cause economic hardship. This might be represented by loss in development, increased revolt risk, and negative opinion modifiers from estates (who lent you they money). To keep existing exploit blocking, you should also lose buildings started recently before you defaulted. The consequence of this should be less dire - your armies shouldn't become paper tigers - but the more drastic effect is that you will be less able to borrow money, and so in a pinch, become much less able to defend yourself if you suddenly need to hire mercs or build up an army.
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