Compendium: State Budget, State Revenue, and State Expense

The SMP Compendium advocates for the Totality of the Socialist nation to uphold fiscal discipline and to live within their own means of production. Everyone who serves the Totality in any economic capacity as a vocational civil servant also deserves the Right to political governance through elected delegates to their local council, regional council and eventually the State Council. Unlike Liberal Capitalism’s Parliamentary Democracy, the Socialist conception of Democracy is called “Council Democracy” (which can be referred to as ‘Council governance’). Councilor governance is more direct in its conduct of Democracy because it stresses the need for political-economic participation in the everyday affairs of the nation-state. This becomes more important because Councilor governance has no periodic elections, corporate lobbyists and billionaire donors, or electoral campaigns insofar as those are all trappings of Parliamentary Democracy. A Council Democracy is led by a ruling People’s Party and various smaller parties affiliated with the former’s United Front as part of the central government.

There is also another aspect of Council Democracy. A part of it pertains to the fact that the power to decide wages is no longer decided by the “employees” and “employers,” that labor strikes and lockouts are banned as commercial weapons employed against the interests of the State and the Totality that ultimately governs the State itself. This power ultimately belongs to the State Commissariats of Wages and Prices, which are government organizations permitted by the State to the alterations of Wages for Paygrades to specific Income Brackets and the Prices of everyday goods and services. If the State Commissariats are going make any changes to Wages or Prices or both, they will need the prior authorization of the State Council and the approval of the Head of State before the end of each fiscal week.

The other part concerns the “State Expenses” and “State Revenues” which affect the “State Budget.” In the SMP Compendium, the Socialist nation generates Revenues and Expenses to the State. The State must ensure that the nation’s Expenses do not surpass its own Revenues.

The idea behind Revenues and Expenses is very simple. If the Revenues are greater than the Expenses, the State Budget increases, meaning the State will have more administrative funds to allocate to any part of the Socialist nation. Alternatively, if the Expenses are greater than the Revenues, the State Budget will decrease to offset the larger Expenses. This results in the State having less administrative funds to allocate to any part of the Socialist nation. When the State Budget finally reaches a negative numerical value, the Socialist nation is now running a fiscal budgetary deficit, forcing the State to find a way to balance its own Budget.

Under normal conditions, the State’s Financial Regime is considered as the Lender of Last Resort under the Work-Standard. If the State Budget is running a fiscal deficit, the Lender of Last Resort status is still the State, the Central Bank a part of its Financial Regime. Until the State manages to balance its Budget, the Socialist nation will begin accumulating Schuld from the Central Bank.   To balance the Budget when it is running a deficit, the State could try to cut spending and levy Taxes on the Totality, but why stick to those methods when the Work-Standard already comes with several other available options?

The State could consider issuances of NSFIs (National-Socialized Financial Instruments) or have the Central Bank raise its Mechanization Rate or consider devaluing the Currency. Help the economic planners boost the overall Quality of Arbeit (QW) and reduce the Quality of Geld (QW). The State can decide extending the work-week by up to 56 hours. Also, if the Socialist nation’s Attrition Rate is running higher than normal, consider bringing Attrition down to sustainable levels; it could be possible that the budgetary deficit is being caused by fluctuations in the rate of Currency Depreciation. 

Another possibility to consider is to have the State Commissariats adjust the Prices of various goods and services if the source of the fiscal budget is from Prices. If the source of the budget deficit originates from a trading deficit, try reducing dependency on foreign imports and work towards a Balance of Trades and Payments with other nations. If there are already any other nations with currencies pegged to the Work-Standard, consider allowing citizens to work abroad and allow foreigners to work within the Socialist nation under the framework of a Real Trade Agreement (RTA), allowing the State itself to contribute additional Arbeit that can be converted into Geld by the Central Bank to balance the Budget. Only cut spending or raise Taxes as a last resort and likewise when deciding to reduce everyone’s Paygrades.         

No matter what happens, always strive to live within one’s own means of production. Do not assume that there is only one way of ensuring a balanced budget. There may be other possibilities which have not yet been considered and could perhaps be a topic of discussion in other parts of the SMP Compendium. Always remember that if the State has the power to create the highest Quality of Arbeit by helping the national economy achieve greater returns of economic growth, letting the State do its part is arguably the fastest way to return to a balanced budget through the lowest Quality of Geld. After all, the Lender of Last Resort is the State and its Financial Regime.



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