Deficit Spending?

low morale

There are a few things you can't do as your treasury gets near and drops below 0 bc, and the behavior isn't consistent across different kinds of actions:

Building starbases and paying starbase module fees: can't do it if it drops bc below zero.

Paying for non-default invasion techniques: I think you can?

Paying 2500 or 10000 to pick an ethical alignment: you can, AND if your bc is below zero it will set it to zero. That is, if you're leaning towards good, have 11000 in the bank, and pick evil, you will have 1000 in the bank. If you are leaning towards good, have -500 in the bank, and pick evil, you will have 0 in the bank. Working as designed, I'm sure!

Probably the most significant thing that happens is that at -500 or lower it won't let you pay for production (essentially forces industrial capacity to zero). So -500 is the magic number you don't want to drop below.

There's a morale hit, too, as mentioned above. Never really noticed it, though.

I'm not 100% certain of everything above and don't have time to check it right now, so it may not all be right. Just saying

Also, there's another mechanism for "borrowing" money in the rush-building options for ships, that allow a player to pay a lower down payment if he or she commits to a series of future payments. It's all rather strange and slapped together (from an economic modeling standpoint). It would be pretty easy to flesh out the system for borrowing into something that works and makes sense, but I doubt that this is anywhere on the priority list right now.

Morale hit only takes affect after a certain number of turns below zero (don't remember how many, but it's quite large).

Also, if you drop below -500, ALL of your production shuts down until you get into the positives again. I found that out the hard way...

The unlimited deficit spending (with penalty past -500) really comes in handy at the start of the game if you've got to crank out just one colony ship / constructor to thwart a competitor.

this is sort of wierd but i bought an expensive ship and did som stuff and dropped below -50,000 bc and next turn it reset to -2000 bc

at the lower difficulty levels -2000 is the max negative you can have.... so you can purchase uber expansive items and have it set it back to -2000 at your next turn. (abit annoying on the largest galaxy where your econmy could easily be rolling 5000-10,000bc a turn and you want to do some "minor" (eg, 3000 or so) deficit spending, because the next turn you only "earn" enough to set it to -2000 instead of your real income...)

Iow moral occurs ONLY if you had deficit for a long time (i think its 20 turns or so). if that happens a red face appears near your treasury.... should you eliminate the deficit the moral hit instantly goes away and does come back for however many turns it takes (so if you have a stable economy you should be able to set production to zero for a turn or two to eliminate moral penalty)

yes but if you drop below 2000 ie upgrading all your ships next turn it is only -2000

Yes, but if you up the difficulty; you'll see that it can drop far below that...

Just to clarify: deficit spending doesn't mean being in debt. It means spending more than your income on any given turn. You could have plenty of bc saved up and run a deficit for as long as it takes you to build up a monstrous army without ever going into debt, for example.

Paying 2500 or 10000 to pick an ethical alignment: you can, AND if your bc is below zero it will set it to zero. That is, if you're leaning towards good, have 11000 in the bank, and pick evil, you will have 1000 in the bank. If you are leaning towards good, have -500 in the bank, and pick evil, you will have 0 in the bank. Working as designed, I'm sure!

Heh. Besides that, it seems strange that, if you are supposed to pay say 2,500 and you have say 2,499, you get to pay a lease of 10 bc for 250 turns , which is to me, obviously superior to 2,500 straight off, because you defer payments at zero interest rate (you can use the cash saved in short term to create more cash by speeding up say purchase of stockmarket) but if you have at least 2,500 you must pay it straight away?? Makes me want to arrange things so that I *don't* have 2,500 when finishing the research of xenoethics!

Might be better of the defered lease payment was something like say 20 bc for 300 turns.

Also, there's another mechanism for "borrowing" money in the rush-building options for ships, that allow a player to pay a lower down payment if he or she commits to a series of future payments. It's all rather strange and slapped together (from an economic modeling standpoint). It would be pretty easy to flesh out the system for borrowing into something that works and makes sense, but I doubt that this is anywhere on the priority list right now.

Also, if you look at some of the options, occasionally you get obviously broken options. for example, if you try to buy diplomactic translator straight off you get the following options

A) 5,580 one time
Inital:3,720 and additional lease payment of 187 for 48 turns
C) Inital: 1,910 and additional lease payment of 93 for 54 turns
D) Inital : 980 and additional lease payment of 43 for 305 turns

As you go down the options, you defer more and more of the payment to future periods, so you would expect the interest to be higher and so total sum of payments to be higher.

But if you do the Math, option B makes you pay a total of 12,696 compared to option C of 6,932!

In other words, Option B makes you pay more, sooner and at a higher rate than option C!