Ok so I'm trying to build a capitalist state but I have no idea what to do with the budget to achieve better economic growth. This are the steps I've taken so far:

- Reduce aquisition taxes to increase demand. Not sure though how much should I lower them to fit capitalist theory. Should I also cut taxes on capital and goods too?
- Increase money supply to further increase demand. Again not sure how this works, just that it leads to inflation. Don't know how bad inflation is to my economy though, I hear deflation is even worse.
- Increase nominal interest in compensation for the inflation to meet the same real interest rate I started with. I have absolutely no idea what I'm doing here.
- Haven't changed tolls since I don't know what this means.

So how should I go about it? Any input is greatly appreciated.

First thing first, I always try to get rid of debts by having a small budget surplus, never good to go deeper and deeper into debt, that's basically like digging your own grave.

How should I get a budget surplus? Lower public expenditure in some areas or lower interest rate?

Hi.. here's my logic..

Increase money supply for instance by 5% whilst increasing public expenditures by a lower rate => i.e. in effect this will mean that whilst the nominal values of these are increasing, in real terms you are tightening the budget

Increasing money supply should reduce currency rate => boost net exports

Increasing money supply would redistribute from the lender to the borrower ... if your govt. has debt, the real value of debt is lowered

Increasing money supply will also push a lot of tax payers onto higher tax bands... thus increasing revenue for the government

Finally slash the Public expenditure adminstration budget by 10% each time you get to change the budget

Remember under 'tasks' ... any budget oriented task decisions would affect your budget components so consider carefully the implication of your decisions on your budget.

Good Luck.. hope this helps

Maybe, you should aim a budget surplus, by reducing your public expenses for administration, justice, defence, subventions and so on and with little bit increasing of taxes. Most of this, rather slightly to avoid unhappiness and collapse of economical growth. (Unfortunately, I have set up this by my states. Actually, I had aimed a balanced budget
To steer the matter via money supply is very is rather unusuall and not practibel. I would prefer money supply increasing in case of deflation, and/or economical downtime.