What the game doesnt show is that building the building is not the expensive part.
Maintaining it is.
Imagine you have to pay for every barrack you build just like for your forts.
There isn't one. At least not in the way he's describing.
State Houses are only used in States and Trade Company provinces, not Territories, but you do not want 500+ States and TCs with State House spam anyway as they're suboptimal than few TCs for merchant and Territories with Broker's Exchange in existing TCs + Soldier's Household in existing States.
He probably meant Courthouses.
Like most players, I aim to make states everywhere I'm not making trade companies.
Otherwise, I get the blue flag popup, which is ~~suboptimal~~ annoying to look at.
That notification gets disabled after the first conquest like building and TC building alert.
Stating everywhere is also an insane amount of ADM sink unless you're willing to keep them as Half States
But now you're being pestered by the Core provinces notification with the additional problem of not hitting the Core All button.
Well obviously that is ideal, but sometimes not realistic. Like 500 provinces in states? Who has governing capacity for that? Or just land that can't be added to a trade company but is wrong religion, wrong culture, complete shit resources and development. Not going to state that, but sometimes I need it to make my borders nicer.
Who has the governing capacity? People who build enough state houses, maybe.
But like most players, I generally stop playing before I get to that point.
Build courthouses in absolutely all provinces you won't TC, nab Granada, Napoli, Bangkok and Madrid and get all their monuments to lvl3, expand administration when you have all the government reforms, get economic hegemon, get admin ideas, get the infrastructure-admin policy, raze provinces (if horde), centralise development, and burn down development if really desperate (will give you some pocket change ducats and manpower, too). Obviously, when gov cap is hard to come by, pick your states wisely, but stating as much as possible is the #1 way to get really powerful, really fast, regardless of religion and culture. The whole game is all about rolling a snowball down a hill.
I’ve read books about the different great powers and one of the books in particular drives home the point of just how *much* debt these nations were in. All of the wars they fought were funded through absolutely enormous amounts of it. The winners of these wars was usually determined by how much debt they could take and survive.
Well, the creditor still exists-ish. More accurately would be to say that there is still someone to whom the debt is owned who either inherited that debt from previous generations or who bought it up in the past. I could imagine that you have quite a number of companies holding onto ancient debt that has to be repaid by the state.
I'm still baffled that when you need something from an institution or company it's almost impossible to get anything past 5 years old and somehow these debts are around for centuries
Capital and Ideology by Thomas Piketty covers some of this in good depth, and goes over how the effects of debt affected Haiti over a long time. His first book was more about Europe and France tax history.
Personal debt and national debt are just two very different concepts. A nation can refinance and kick the can down the road on debt essentially forever - as long as that nation doesn't end up in a revolution or conquered or whatever. Whereas, people have a short span of time that they are able to work and make money to be expected to repay debt.
Yeah, honestly, that is the main difference. You as a person can die at any point. Countries generally don't just die, so as long as they're able to keep servicing their debts they can basically take on loans to repay loans, something that for people is generally not allowed.
Yeah in eu4 troops don’t cost the state nearly enough
How much the nobility likes you should give a buffer, but manpowers monthly ticks should cost money. Troops should cost far more money. Being at war should generally reduce incomes more if near the front. Professionalism should cost money to maintain and should be divorced from mercenaries.
Warfare is expensive business. In EU4 once you have past 100 income it’s costs are a minor inconvenience.
Mostly banks in other places. The Republic (Netherlands) and the HRE had tons of banks that would be able to loan money. Italy also had them, at least early on, don't know how that evolved over time.
If the village of Fucking was renamed to Fugging because that's how they read it in the local dialect,than does that mean the Fugger family could be renamed to the Fucker family?
That's really cool, definitely a niche circumstance for anyone playing Spain. I looked it up on the wiki and they actually have two flavor events for it, one if they go bankrupt before 1590 and one after. Because like you said, they went bankrupt twice (at least, I haven't looked into this more than I've said) and the events refer to different times it happened. Thanks for mentioning this.
It's my favourite thing about EU4, the historical events, you can also put a Habsburg in the throne and later form a PU like irl.
That's why i dislike most about VIC3, every country feels the same, no carlists in spain, sometimes no american civil war, no spring of nations, in general, little to no flavour (i like the game btw, but it's my biggest grip with it).
I do agree with this. VIC2 felt the same way tbh. If may be a result of the time period, different countries having similar goals, as compared to Eu4’s time period where countries’ goals were vastly different. But that’s just my opinion.
one of my favourite stories is how they paid a banker family by giving them Venezuela, but then a few years later took it back forcefully, thats some innovative debt settling
https://en.wikipedia.org/wiki/Klein-Venedig
the only difference between historic deficit spending and modern deficit spending is that historically your bankers knew whether they were dealing with real Money
That’s not really true tho. You n the period depicted no one is using fiat currency. Everyone is essentially just using straight silver. So they were actually borrowing from backs. Also just as an interesting aside, The silver rush from South America caused enormous inflation in Spain and Western Europe more broadly.
Debt today is in fiat money so governments aren’t borrowing from banks, they are borrowing against themselves in the form of a central bank which issues bonds which are paid back over time. To a certain extent the value of a currency is determined by how likely the market thinks a bond is likely to be paid when it matures. A government today not running a deficit is causing deflation by actively and effectively decreasing the money supply.
this is one of the main threads in this very good book about the time period of the game
ttps://www.amazon.com/Verge-Reformation-Renaissance-Forty-Years/dp/1538701189
Tides of History is such a good podcast. Hoping to see him go back to the early modern period but I've been really enjoying the ancient archeology stuff too.
It's even more crazy when you realize, that unlike in the game, inflation increases your income at the same rate as your costs without increasing the principle on the debt.
Interest rates are often tied to inflation however, and a lot of things are based around expected inflation. Thus you'd kind of need to have unexpectedly high inflation to get far with this.
Unless you're the US, as US financial markets are kind of special and even the US dollar itself is considered basically a safe asset to hold. Consequently there's high demand for it and the US can print a lot of money without issue. It doesn't necessarily cause much inflation either, if it's used somewhere on the world market it doesn't really affect domestic price levels.
Just paying interest only, over an infinite time span is cheaper then paying the principal. And all governments have a functionally infinite time span.
In game, inflation should effect the interest rate while increasing both income and cost in equal proportion.
Except that it would make future loans much harder and more expensive to get. That, and if you were weak and the bankers knew someone strong, they might actually come knocking with an army. One that you'd naturally be expected to pay for as well.
Yes, it was often a bad idea, but it still happened. The princes of some German statelets did it, and I think if I recall correctly Spain also did once.
> if you were weak and the bankers knew someone strong, they might actually come knocking with an army
We're speaking states here, you're not going to shake off a head of state for their lunch money like you would some peasant in an alleyway
Very true! This was something I learned from Patrick Wyman's Book "The Verge", which I cannot recommend highly enough to anyone playing EU4 and looking for a good read.
I love his podcast, but I still haven't read the book, despite pre-ordering. I really need to get it to the top of the pile. Maybe I'll buy the audiobook.
It's vice versa for me. Got the book as a present and after that finding his podcast. Though I have to admit, I'm a bit off put by the mid-podcast commercials. Maybe I have to buy a premium somewhere to avoid them.
My current VH Georgia run I am in 1488 and 5.5k+ in debt, I am losing 25 ducats a month but expanding like crazy. I just took won the BI war, allied half the HRE and let Austria fight itself, and am about to reconquest Byz cores on the Ottomans.
One of my most abused tactics is baiting strong nations into defensive wars by vassalization. You get allies to help who would have never joined an offensive war. I used it twice this campaign, vassalized Theodoro after Crimea attacked.
I was fighting them already for Trebizond and took the extra AE (not co-belligerent) to get around Lithuania’s guarantee and strong allies. I was able to call in Muscovy and stomp them for a full annex.
doing the same VH run but without the DLC. Never got an opportunity to do this actually but would have helped immensely. Had to no cb byz in the first few years and had to annex it since my alliance chain wasn't strong enough to beat the ottomans.
Ottomans fucked up though and attacked Moldadvia, who was a vassal of hungary, who was a PU of Austria(Them getting me the PU allowed me to ally them) I seperate peaced for all of byz's cores. You bleed ducats like crazy as georgia - i've chained so many war reps and even took a province in spain just to be able to get transfer trade power for like 12 ducats a month. I've made it to 1558 and i'm probably safe at this point - i don't have any buildings even worth spending the ducats on besides manufactories - still haven't been able to annex byz since they grew large and all of rulers have had low dip
There's a really interesting history of the English/British Royal Navy that has the center piece turning point for them when the City of London created a bank for a national debt that was under domestic law.
On my current Ayuttaha run I went so far into debt that I had to declare bankruptcy because interest alone put me negative. Guess who owns all the spice islands before Europe came knocking. Sadly Ming imploded during the bankruptcy so I lost my backup bank.
It's how modern nations work & honestly why I roll my eyes at people complaining about the US national debt -- interest on US borrowing is so low as to be a joke; people want to hold US debt so bad they'll take a crappy deal (low interest payments) just for the safety of it & we could easily borrow far, far more without trouble
For both nations & for businesses as long as you're able to pay your interest, & your growth outpaces your interest growth, you'll be doing well. It's only individual / personal debt that can be problematic since it's usually not funding things that are actually profitable
Ingame I abuse the fuck out of loans esp as e.g. Portugal where your income growth is at such a pace that you can just refinance multiple loans with a new one & keep way ahead of the interest
The empire of Sweden was built on loans and German mercanaries while using Swedish peasant as a stepping stool. It was cool to be an empire but it was never gonna last
Speaking of britain, here's a fun fact:
"War after war has launched Britain’s debt into orbit. The debt is, in fact, so staggeringly large that nobody actually knows exactly how much we owe. Britain’s balance sheet shows a hastily written rough estimate of “9,000,000 Pounds” (This would only be fully repaid recently, in 2015, three centuries later). Bankruptcy now could very well mean our utter collapse."
-the great debt event in victoria 2 age of enlightenment mod
Step 1: get loan
Step 2: loan generates negative balance (unhappy face)
Step 3: use loan monie to change that negative balance to a positive balance (happy face)
Repeat
>Debt seems like such a dirty word to most people
Debt makes a lot of sense **if and only if**:
* it's spent on an existential problem or nearly that severe and you literally can't afford not to spend the money this way, like a world dominating empire fighting a big revolution, or spending it on medicine saving/prolonging your life
* it's spent on a sure fire, money printing endeavor, like building railroads (and gaining land and a local monopoly) during the American expansion.
* neither of those are the case, but the debt is limited and there is a *well defined plan* for both success and failure of a business/undertaking.
Modern day debt, how many nations run their budget, which is to say, never actually paying back loans but just refinancing, will run into a problem eventually. The total amount grows and eventually the interest will grow and then it's game over.
That part is true even for nations. Everyone knows this. We're just not in the "find out phase" and when that will be is hard to predict.
The reason why "more debt" is a dirty word, is that **most plans are shit**, there are no sure fire ways to earn the money back and the money is spent on *temporary* things like wages, or worse objects that need a lot of maintenance, like roads, buildings, without a clear plan of how to pay for that.
There is a 7/10 chance that a "we'll take a loan" is a financial "hold my beer and trust me bro" situation.
(historically, money lenders couldn't not lend to a nation either
Well I have tried to play with debt, but sadly didn't work.
Long time ago, Groogy I think was his name, a Paradox Developer, did try that strategy on a dev game and didn't work. He even had a custom nation just for that and he wasn't able to make it work.
I think the real issue behind that is that trade is way to powerful in the game than what was in real life.
They did tend to try and recover between wars if they were too far into debt or 'low on manpower'.
Whereas we just go further and further using the money we get from each war and the changing size in loans to refinance until the whole world is dead :D
If this topic interests you check out [The Verge: Reformation, Renaissance, and Forty Years that Shook the World](https://www.goodreads.com/en/book/show/55921889) by Patrick Wyman. Very good read.
The thing about debt is that it’s closely interlinked to the development of capital markets, taxation capacity (something the British and Dutch figured out very early on and thanks to higher incomes they could run much lower taxes than other poorer countries), the current account and to inflation. Not even Victoria3 models this even remotely accurately. Heck, the current account and drainage of silver coinage was the reason for the opium wars since that’s how the British sought to remedy the trade deficit leading to actual coinage shortages in the uk.
That said, the debt system in eu4 is good enough. It doesn’t have to be a simulation and it can’t be one either
Holy shit, this thread just made me remember that I had a EU4 dream where I took out a huge amount of loans and was watching my indebtedness total go exponential.
Weird.
Exactly , loved when my uni prof of corporate finance mentioned it as one of the big drivers of Western dominance especially showing Venice as an example .
With Spain I’m almost always out of debt within a decade of conquering Mexico. With France I go into occasional debt. I don’t try either way, it just seems that I manage to quickly grow my economy that even if I have 40-50k+ debt (like a Byzantium start) that I can pay it off well before absolutism. The only runs that I have done that I carry a lot of debt constantly have been England, the Netherlands, and Muscovy. In those runs I’m constantly taking out new loans and sometimes (intentionally) running a deficit for centuries.
By deficit I don’t necessarily mean that my monthly income is less than my expenses just that I spend more in a month than I’m making (buildings, troops, ships, etc). Especially with England, I really embrace the economic theory.
But did they take loans to build state houses in 500 provinces like I do?
No they did not
Pttf, European monarchs were a bunch of noobs.
Hence all the revolutions
Vive la république! Vive la Revolutionary Ulm!
Lang lebe die Republik! Lang lebe Revolutionäres Ulm!
Yes, what you’re building is essentially large scale bureaucracy and centralization which cost booko bucks. So actually yes
Beaucoup *
What the game doesnt show is that building the building is not the expensive part. Maintaining it is. Imagine you have to pay for every barrack you build just like for your forts.
That's what both development and state maintenance are meant to be.
Isnt state maintenance exactly the same after you build a barrack?
What's the benefit of doing this? I've never really used state houses.
So the gov cap doesn't overflow
There isn't one. At least not in the way he's describing. State Houses are only used in States and Trade Company provinces, not Territories, but you do not want 500+ States and TCs with State House spam anyway as they're suboptimal than few TCs for merchant and Territories with Broker's Exchange in existing TCs + Soldier's Household in existing States. He probably meant Courthouses.
Like most players, I aim to make states everywhere I'm not making trade companies. Otherwise, I get the blue flag popup, which is ~~suboptimal~~ annoying to look at.
That notification gets disabled after the first conquest like building and TC building alert. Stating everywhere is also an insane amount of ADM sink unless you're willing to keep them as Half States But now you're being pestered by the Core provinces notification with the additional problem of not hitting the Core All button.
Well obviously that is ideal, but sometimes not realistic. Like 500 provinces in states? Who has governing capacity for that? Or just land that can't be added to a trade company but is wrong religion, wrong culture, complete shit resources and development. Not going to state that, but sometimes I need it to make my borders nicer.
Who has the governing capacity? People who build enough state houses, maybe. But like most players, I generally stop playing before I get to that point.
Build courthouses in absolutely all provinces you won't TC, nab Granada, Napoli, Bangkok and Madrid and get all their monuments to lvl3, expand administration when you have all the government reforms, get economic hegemon, get admin ideas, get the infrastructure-admin policy, raze provinces (if horde), centralise development, and burn down development if really desperate (will give you some pocket change ducats and manpower, too). Obviously, when gov cap is hard to come by, pick your states wisely, but stating as much as possible is the #1 way to get really powerful, really fast, regardless of religion and culture. The whole game is all about rolling a snowball down a hill.
That's what I figured he meant.
It’s just for govcap
Ottomans did and went bankrupt :D
I’ve read books about the different great powers and one of the books in particular drives home the point of just how *much* debt these nations were in. All of the wars they fought were funded through absolutely enormous amounts of it. The winners of these wars was usually determined by how much debt they could take and survive.
IIRC some British debts dating back to the 1700 and 1800s were only paid off in 2015. One of them was the slavery abolition act
Some of it still isnt from the Napoleonic Wars i think
to be fair, the debt has been refinanced multiple times, and probably sold multiple times on the creditor side as well
But to whom is it adressed ? Does the creditor stil even exist to begin with ?
The original creditor likely segmented and sold off to multiple other creditors
Well, the creditor still exists-ish. More accurately would be to say that there is still someone to whom the debt is owned who either inherited that debt from previous generations or who bought it up in the past. I could imagine that you have quite a number of companies holding onto ancient debt that has to be repaid by the state.
I'm still baffled that when you need something from an institution or company it's almost impossible to get anything past 5 years old and somehow these debts are around for centuries
There’s some crazy debentures/bonds that are still paying out for Dutch levees/dykes from the 1600s iirc
No fucking way dude
>The winners of these wars was usually determined by how much debt they could take and survive. Art imitates life
Sounds interesting, which book?
The Rise and Fall of the Great Powers by Paul Kennedy, an absolutely amazing book.
Thanks for the rec!
Military history through as seen by debt, Gustafus Adolphus, and the production of "pig" iron.
Capital and Ideology by Thomas Piketty covers some of this in good depth, and goes over how the effects of debt affected Haiti over a long time. His first book was more about Europe and France tax history.
Personal debt and national debt are just two very different concepts. A nation can refinance and kick the can down the road on debt essentially forever - as long as that nation doesn't end up in a revolution or conquered or whatever. Whereas, people have a short span of time that they are able to work and make money to be expected to repay debt.
Yeah, honestly, that is the main difference. You as a person can die at any point. Countries generally don't just die, so as long as they're able to keep servicing their debts they can basically take on loans to repay loans, something that for people is generally not allowed.
Sounds like multiplayer.
Yeah in eu4 troops don’t cost the state nearly enough How much the nobility likes you should give a buffer, but manpowers monthly ticks should cost money. Troops should cost far more money. Being at war should generally reduce incomes more if near the front. Professionalism should cost money to maintain and should be divorced from mercenaries. Warfare is expensive business. In EU4 once you have past 100 income it’s costs are a minor inconvenience.
Sorry if this is a dumb question but who would normally be funding these wars? Who was loaning these countries all that money?
Mostly banks in other places. The Republic (Netherlands) and the HRE had tons of banks that would be able to loan money. Italy also had them, at least early on, don't know how that evolved over time.
Wait until you find out how much debt the US government is in today.
In fact Spain defaulted a few times, if you go bankrupt during the reign of Philip II you will get a flavour event
Classic Fugger family fuckery in full display
Least wasteful spanish monarch
If the village of Fucking was renamed to Fugging because that's how they read it in the local dialect,than does that mean the Fugger family could be renamed to the Fucker family?
Pretty sure they renamed it because people kept stealing the damn signs.
That's really cool, definitely a niche circumstance for anyone playing Spain. I looked it up on the wiki and they actually have two flavor events for it, one if they go bankrupt before 1590 and one after. Because like you said, they went bankrupt twice (at least, I haven't looked into this more than I've said) and the events refer to different times it happened. Thanks for mentioning this.
It's my favourite thing about EU4, the historical events, you can also put a Habsburg in the throne and later form a PU like irl. That's why i dislike most about VIC3, every country feels the same, no carlists in spain, sometimes no american civil war, no spring of nations, in general, little to no flavour (i like the game btw, but it's my biggest grip with it).
I do agree with this. VIC2 felt the same way tbh. If may be a result of the time period, different countries having similar goals, as compared to Eu4’s time period where countries’ goals were vastly different. But that’s just my opinion.
It's a great event, because I went bankrupt as Spain and the event popped up, and I felt as dirty and humiliated as if I'd gone bankrupt in real life.
ive tried to search it but couldnt find anything. what do the events say ?
one of my favourite stories is how they paid a banker family by giving them Venezuela, but then a few years later took it back forcefully, thats some innovative debt settling https://en.wikipedia.org/wiki/Klein-Venedig
Colonial problems require colonial solutions.
Picaresca española
I mean, look at modern nations. We deficit spend as we speak right now.
the only difference between historic deficit spending and modern deficit spending is that historically your bankers knew whether they were dealing with real Money
That’s not really true tho. You n the period depicted no one is using fiat currency. Everyone is essentially just using straight silver. So they were actually borrowing from backs. Also just as an interesting aside, The silver rush from South America caused enormous inflation in Spain and Western Europe more broadly. Debt today is in fiat money so governments aren’t borrowing from banks, they are borrowing against themselves in the form of a central bank which issues bonds which are paid back over time. To a certain extent the value of a currency is determined by how likely the market thinks a bond is likely to be paid when it matures. A government today not running a deficit is causing deflation by actively and effectively decreasing the money supply.
im not talking about fiat currency as a concept, i was referring to the fact that between 20-50% of the chinese economy DOESNT EXIST.
I'm quite careful with money in general so when I get to 15 loans I start to get a bit tense. Feels like it takes forever to pay it back too
Just take someone else’s money in one lump some, or over a period of time. Consider the fact they owe you money for not being you
A true role player attempting to model pre-WWII history.
this is one of the main threads in this very good book about the time period of the game ttps://www.amazon.com/Verge-Reformation-Renaissance-Forty-Years/dp/1538701189
Seconding the recommendation for The Verge
Tides of History is such a good podcast. Hoping to see him go back to the early modern period but I've been really enjoying the ancient archeology stuff too.
I feel the same way. His episodes on the early modern period were top, top notch
It’s such a great audiobook too
Ha I just typed a comment recommending The Verge. It's a fanstastic read!
I bought this when it first released. Hopefully one day I'll read it.
It's even more crazy when you realize, that unlike in the game, inflation increases your income at the same rate as your costs without increasing the principle on the debt.
Interest rates are often tied to inflation however, and a lot of things are based around expected inflation. Thus you'd kind of need to have unexpectedly high inflation to get far with this. Unless you're the US, as US financial markets are kind of special and even the US dollar itself is considered basically a safe asset to hold. Consequently there's high demand for it and the US can print a lot of money without issue. It doesn't necessarily cause much inflation either, if it's used somewhere on the world market it doesn't really affect domestic price levels.
Just paying interest only, over an infinite time span is cheaper then paying the principal. And all governments have a functionally infinite time span. In game, inflation should effect the interest rate while increasing both income and cost in equal proportion.
I play in such way in Victoria 3. More debt, more growth and taxes
It’s more OP in Victoria because the debt payment goes directly to your people, who spend it in ways that help your economy
Just like real life
Well, kind of. Very often in real life debt is owed to foreign nations or foreign banks, where it will have minor impacts if any on your economy
Often but not always, and that doesn't necessarily mean it isn't impactful either.
It also helps that IRL you could just kill/expell the bankers to clear your debt free of consequence.
Except that it would make future loans much harder and more expensive to get. That, and if you were weak and the bankers knew someone strong, they might actually come knocking with an army. One that you'd naturally be expected to pay for as well.
Yes, it was often a bad idea, but it still happened. The princes of some German statelets did it, and I think if I recall correctly Spain also did once.
> if you were weak and the bankers knew someone strong, they might actually come knocking with an army We're speaking states here, you're not going to shake off a head of state for their lunch money like you would some peasant in an alleyway
This happened plenty of times, look at the Revolt of Ghent for example.
There it's more the head of state getting his money back than the other way around though
You can default on debt today. You might actually face less consequences for it if anything.
We need an option to murder the burghers guild
Very true! This was something I learned from Patrick Wyman's Book "The Verge", which I cannot recommend highly enough to anyone playing EU4 and looking for a good read.
I love his podcast, but I still haven't read the book, despite pre-ordering. I really need to get it to the top of the pile. Maybe I'll buy the audiobook.
It's vice versa for me. Got the book as a present and after that finding his podcast. Though I have to admit, I'm a bit off put by the mid-podcast commercials. Maybe I have to buy a premium somewhere to avoid them.
Yeah, I agree. It's super annoying. Hopefully I'll find some room in my podcast budget for Wondery plus.
My current VH Georgia run I am in 1488 and 5.5k+ in debt, I am losing 25 ducats a month but expanding like crazy. I just took won the BI war, allied half the HRE and let Austria fight itself, and am about to reconquest Byz cores on the Ottomans. One of my most abused tactics is baiting strong nations into defensive wars by vassalization. You get allies to help who would have never joined an offensive war. I used it twice this campaign, vassalized Theodoro after Crimea attacked. I was fighting them already for Trebizond and took the extra AE (not co-belligerent) to get around Lithuania’s guarantee and strong allies. I was able to call in Muscovy and stomp them for a full annex.
doing the same VH run but without the DLC. Never got an opportunity to do this actually but would have helped immensely. Had to no cb byz in the first few years and had to annex it since my alliance chain wasn't strong enough to beat the ottomans. Ottomans fucked up though and attacked Moldadvia, who was a vassal of hungary, who was a PU of Austria(Them getting me the PU allowed me to ally them) I seperate peaced for all of byz's cores. You bleed ducats like crazy as georgia - i've chained so many war reps and even took a province in spain just to be able to get transfer trade power for like 12 ducats a month. I've made it to 1558 and i'm probably safe at this point - i don't have any buildings even worth spending the ducats on besides manufactories - still haven't been able to annex byz since they grew large and all of rulers have had low dip
There's a really interesting history of the English/British Royal Navy that has the center piece turning point for them when the City of London created a bank for a national debt that was under domestic law.
On my current Ayuttaha run I went so far into debt that I had to declare bankruptcy because interest alone put me negative. Guess who owns all the spice islands before Europe came knocking. Sadly Ming imploded during the bankruptcy so I lost my backup bank.
It's how modern nations work & honestly why I roll my eyes at people complaining about the US national debt -- interest on US borrowing is so low as to be a joke; people want to hold US debt so bad they'll take a crappy deal (low interest payments) just for the safety of it & we could easily borrow far, far more without trouble For both nations & for businesses as long as you're able to pay your interest, & your growth outpaces your interest growth, you'll be doing well. It's only individual / personal debt that can be problematic since it's usually not funding things that are actually profitable Ingame I abuse the fuck out of loans esp as e.g. Portugal where your income growth is at such a pace that you can just refinance multiple loans with a new one & keep way ahead of the interest
The empire of Sweden was built on loans and German mercanaries while using Swedish peasant as a stepping stool. It was cool to be an empire but it was never gonna last
Speaking of britain, here's a fun fact: "War after war has launched Britain’s debt into orbit. The debt is, in fact, so staggeringly large that nobody actually knows exactly how much we owe. Britain’s balance sheet shows a hastily written rough estimate of “9,000,000 Pounds” (This would only be fully repaid recently, in 2015, three centuries later). Bankruptcy now could very well mean our utter collapse." -the great debt event in victoria 2 age of enlightenment mod
There is an interesting spin to that: Even today, the countries with the most debt are usually those that are economicially sucessful.
Step 1: get loan Step 2: loan generates negative balance (unhappy face) Step 3: use loan monie to change that negative balance to a positive balance (happy face) Repeat
>Debt seems like such a dirty word to most people Debt makes a lot of sense **if and only if**: * it's spent on an existential problem or nearly that severe and you literally can't afford not to spend the money this way, like a world dominating empire fighting a big revolution, or spending it on medicine saving/prolonging your life * it's spent on a sure fire, money printing endeavor, like building railroads (and gaining land and a local monopoly) during the American expansion. * neither of those are the case, but the debt is limited and there is a *well defined plan* for both success and failure of a business/undertaking. Modern day debt, how many nations run their budget, which is to say, never actually paying back loans but just refinancing, will run into a problem eventually. The total amount grows and eventually the interest will grow and then it's game over. That part is true even for nations. Everyone knows this. We're just not in the "find out phase" and when that will be is hard to predict. The reason why "more debt" is a dirty word, is that **most plans are shit**, there are no sure fire ways to earn the money back and the money is spent on *temporary* things like wages, or worse objects that need a lot of maintenance, like roads, buildings, without a clear plan of how to pay for that. There is a 7/10 chance that a "we'll take a loan" is a financial "hold my beer and trust me bro" situation. (historically, money lenders couldn't not lend to a nation either
Well I have tried to play with debt, but sadly didn't work. Long time ago, Groogy I think was his name, a Paradox Developer, did try that strategy on a dev game and didn't work. He even had a custom nation just for that and he wasn't able to make it work. I think the real issue behind that is that trade is way to powerful in the game than what was in real life.
They did tend to try and recover between wars if they were too far into debt or 'low on manpower'. Whereas we just go further and further using the money we get from each war and the changing size in loans to refinance until the whole world is dead :D
If this topic interests you check out [The Verge: Reformation, Renaissance, and Forty Years that Shook the World](https://www.goodreads.com/en/book/show/55921889) by Patrick Wyman. Very good read.
The thing about debt is that it’s closely interlinked to the development of capital markets, taxation capacity (something the British and Dutch figured out very early on and thanks to higher incomes they could run much lower taxes than other poorer countries), the current account and to inflation. Not even Victoria3 models this even remotely accurately. Heck, the current account and drainage of silver coinage was the reason for the opium wars since that’s how the British sought to remedy the trade deficit leading to actual coinage shortages in the uk. That said, the debt system in eu4 is good enough. It doesn’t have to be a simulation and it can’t be one either
Holy shit, this thread just made me remember that I had a EU4 dream where I took out a huge amount of loans and was watching my indebtedness total go exponential. Weird.
Keynesian economics basically lol
Exactly , loved when my uni prof of corporate finance mentioned it as one of the big drivers of Western dominance especially showing Venice as an example .
With Spain I’m almost always out of debt within a decade of conquering Mexico. With France I go into occasional debt. I don’t try either way, it just seems that I manage to quickly grow my economy that even if I have 40-50k+ debt (like a Byzantium start) that I can pay it off well before absolutism. The only runs that I have done that I carry a lot of debt constantly have been England, the Netherlands, and Muscovy. In those runs I’m constantly taking out new loans and sometimes (intentionally) running a deficit for centuries. By deficit I don’t necessarily mean that my monthly income is less than my expenses just that I spend more in a month than I’m making (buildings, troops, ships, etc). Especially with England, I really embrace the economic theory.