Alexander Hamilton
Finance Matters
Alexander Hamilton |
At the start of the Washington administration, the new country had no money in the bank and expenses of about $15 million per term, hence zero reserves and a revenue of -15 at the start.
Hamilton wanted to absorb the debts the states had incurred during the Revolutionary War, which encompassed about $25 million. The corresponding issue deducts 25 from reserves.
The valuation of the paper IOUs the Continental Congress had issued during the war was $52 million, and 52 is the amount the issue deducts from reserves.
In the game the issue that ends slavery costs $200 million. This is an alternate history issue that in real life never happened, though it had been suggested, though at a valuation of $50 million. As it never occurred, it seemed that doubling this total and doubling it again might just make it believable.
The situation with tariffs is more difficult to represent. A tariff is actually not a single rate, but a very long list of items, their standard quantities and the tax rates to add to each of them. As such, there were innumerable ways to modify the tariff, including the ability to make rates on some imports higher and those on others low or even nonexistent. The design solution was to generalize to a particular level. A level I tariff represents a low level designed only to generate income, which was agreeable to nearly everyone. On top of this administrations can turn the screws more and more, earning more income, but less at each level and with less and less support from the public. These levels begin to represent not merely generating income, but also actually a form of subsidy to domestic industries, as manufactured items were the most common type of import. Ultimately, an administration can even tax so much – presumably for cynical political purposes, as occurred with the Tariff of Abominations – so as to be counterproductive to income.
In later eras, here are some issues that cost the same in the game as in real life:
The interest on the debt is considered to be about 7.5%, a reasonable approximation for the era. Consequently, per term interest is 30%. Interest on a surplus is not shown as it is assumed to be gobbled up by pork and corruption.
Adding states would increase the amount of tax paid to the federal government. However, it would also increase expenses as the government would have to create postal and other offices as well as forts, hire postal workers, land inspectors and surveyors, and coast guards, and deploy soldiers at the borders. These amounts are difficult to quantify. It keeps the game simpler to assume these quantities offset one another. Meanwhile, the amounts the federal government would earn from land sales appear via land sale issues cards.
Economic Crisis is another alternate history situation that did not really occur in real life, requiring some estimation in terms of levels and consequences. What amount of debt would really have caused serious problems to the young state? Well, it reached $77 million and all turned out relatively okay in the end so that amount was likely always going to be workable. But how much more before it would not be so? Humans often fasten on round numbers, and that would include bankers, so perhaps a hundred million would have been a completely unacceptable level of debt. It's also an amount that players can manage in most situations so that most games can navigate these shoals, unless players are become extremely daring or unable to work with one another.
