The Emperors' SolutionA very European fable

“Insanity: doing the same thing over and over again and expecting different results.”

- Unknown (but attributed to Albert Einstein)

The 27 countries that made up the Empire Zone (and the 5 "about to join" peripheral territories) had known only increasing prosperity for 50 of the last 60 years

- or so they had convinced themselves.

The New Empire ScissorRand (Ω) had brought peace, harmony, social justice and "ended boom and bust

once and for all".

The sunlit uplands of cuddly socialism beckoned for all

Yet the Council of Emperors was in a quandary

For the last 6 years an economic crisis had raged on across the empire with no end in sight

The Wise Men of the Viziers' Council had prescribed more and more stimulus money and yet this had

mysteriously vanished without trace.

The Book of Keynes had been consulted and read, re-read and re-interpreted but to no avail.

Annual deficits of 1.2 trillion ScissorRands were still running in even individual national territories and yet

nothing good was happening

Total debt was in the hundreds of trillions of ScissorRands

The outer regions of the New Empire were still suffering and in fact seemed to be getting poorer even

as the handouts they received grew ever larger

In fact the only people getting richer all lived in the Imperial Cities - the bureaucratic capitals of each of the

territories

There was no recession here - life was good

Expenses payments had never been higher

Every week, a new bar, restaurant or opera opened.

And still the Council of Emperors could not put 2 and 2 together

So far 6 years of stimulus had produced 100 times the original debt that had led to the mess in the first place

and now even the economically illiterate Council of Emperors was starting to suspect that the New

Keynesians might not be that bright after all

or that there was some nefarious connection between the size of the bailouts and the prosperity of NK-

politically connected bureaucrats and government contractors

Finally the Council of Emperors decided it was time to try something else

They consulted the Academy of Economists

a learned body of very much bearded, bespectacled, studious looking and serious men

and one French woman

The New Keynesians argued for bailouts, increased spending, increased taxes, increased regulation and

centrally controlled economic policy

Whereas the Osterrians argued for fewer (and preferably no) taxes, less regulation, no bailouts, no

central control and reduced public spending but increased private spending

A compromise was arrived at

The Empire ScissorRand was to be divided into 2 new currencies

A North Empire ScissorRand and a South Empire ScissorRand

The less fortunate members of the Empire

(because only luck determined economic success)

could use the latter and devalue somewhat...

without losing face (i.e. admitting that they needed urgent reforms)

There was much grumbling amongst the NK faction, but they went along with it

on the proviso that another 100 billion ScissorRands

were "injected into the real economy"

Yes I know ' Where did they get the 100 billion ScissorRands to

"inject" in the first place? '

A very good and pertinent question

One that is not asked often enough - if at all

By stealing it from the very people who were only prosperous in the first instance because they made

correct economic decisions and lived productive and relatively frugal lives

or rather by indebting both the current and future generations to pay for the follies of the profligate

whims and foolish desires of this generation

but this, like much of Keynesian Economics, is a fairytale so please just bear with me.

There was rejoicing, back-slapping and bonuses all round. A new country joined the Empire bringing the

total to

28

32 weeks later the same situation was afoot

The poorer members of the Empire were still poor and screaming for bailouts

A Plan B was devised

It was decided again to divide the Empire ScissorRands currencies again into 2

Now, in addition to the North Empire ScissorRand and South Empire ScissorRand,

there would be an East Empire ScissorRand and a West Empire ScissorRand

The less productive countries could then use the latter 3 currencies to devalue somewhat

There was grumbling amongst the NK faction, but they went along with the new plan

on the proviso that another 200 billion ScissorRands

were "injected into the real economy"

There was yet more rejoicing, back-slapping and bonuses all round. A new country joined the Empire

bringing the total to 29

Yet 16 weeks later, something was still not quite right.

The lowest earning territories of the Empire were still poor, still suffering and now screaming for even more

bailout cash

while simultaneously casting aspersions on other countries that had never needed even 1/00th of the

bailout money they decided was their due

A Plan C was devised

It was decided again to divide the Empire ScissorRands currencies again into 2

Now, in addition to the North, South, East and West Empire ScissorRands,

there would be a NorthWest Empire ScissorRand, a SouthWest Empire ScissorRand, a NorthEast Empire ScissorRand and a SouthEast Empire ScissorRand

Bringing the total to 8 currencies

The weaker countries

(yes, they had taken off the kid gloves by now)

could use the 7 latter currencies, while Te-Uton - the strong region - would alone keep

the North Empire ScissorRand

There was grumbling amongst the NK faction, but they went along with the new plan

on the proviso that another 400 billion ScissorRands

were "injected into the real economy"

There was rejoicing, back-slapping and bonuses all round. A new country joined the Empire bringing the

total to 30

8 weeks later....

More of the same

BEDLAM

Hair (what was left of it) was being pulled out and teeth were being gnashed

"Capitalism was broken!" - the people cried

The sensible economists amongst them tried to point out that Capitalism had not actually been in evidence in

the empire for 200 years...

but they were drowned out by those calling for a Plan D

Perhaps you can see which way this is going by now...

8 weeks later,

800 billion in bailouts,

more taxes, 31 countries...

4 weeks later,

1,600 billion in bailouts,

even more taxes, 32 countries...

Time elapsed

60 weeks

Total bailouts so far

Ω3.1 Trillion

But then just 2 weeks later, a great plague struck the Imperial City and the New Keynesians were all struck

dumb

The ones that could still communicate by hand waving were shunned by the rest of the population for fear of

catching the virus.

The remaining economists used the opportunity to try a new course of action across the Empire.

To write off the ridiculous ' stimulus "money" '

To institute a sound money finance system (removing the parasitic need to pay interest to private entities for

money creation)

To reduce taxes to a flat 10% for corporations and a flat 5% for private individuals

They annulled 90% of most of the laws

They shrank the size of the Empire bureaucracy to less than 5% of its pre-crisis size

and they promoted economic freedom, mainly by deregulating almost everything that could be - freeing

the citizenry from arbitrary denials by jumped up bureaucrats

The one thing they did keep from before was the 32 subdivided currencies

They renamed each currency to the country of the territory in which it was used

e.g. the Te-Uton Scissorrand, the Frankish ScissorRand, the Osterreich ScissorRand etc

and created a massive continent wide free trade zone in which any territory could export and import at will

with no barriers, tariffs or any other sort of fetid mercantilism

Within 2 weeks the New Empire

(which was now no longer an Empire since each territory controlled its own economic destiny)

was starting to show signs of revival

Sure, the bureaucratic dwellers in each of the Imperial Cities of Sprouts were now out of work and finding that

no one valued anything they had to offer

(most died in ignominy soon after the trough was taken away)

but 500 million people across the former Empire were beginning to prosper again, finally freed from burdensome taxes and pointless regulations

A motion was passed to burn all the copies of the Book of Keynes

but wiser heads prevailed arguing that it was still instructive to see how completely and easily people

could be seduced by claptrap

interpretations

One copy was kept on permanent display in each of the territory capitals in a locked golden case in the main

square as a warning to future generations

with the incorrectly interpreted policy prescriptions

And the New Republic Commonwealth of Brother Nations

prospered

The End