Every number on the rest of this site is real and cited. Nothing on this page is. This is a simplified model nation with 41 policy dials and 12 scenarios pulled from history. Print money. Raise tariffs. Go back on gold. Being wrong here is free.
Ready when you are
Ten million simulated people are waiting for your first mistake.
Press Run to start the clock, or load a scenario above. The dials stay live while it runs, so you can fight the fire you started.
Under the hood
The simulator moves one quarter at a time. Each quarter it recalculates output, prices, jobs, credit, markets, trade, and the social ledger, using simpler versions of the rules taught in econ class. Same dials, same starting point, same result, every time. So your experiments repeat. It is a teaching tool, not a forecast.
In automatic mode, the central bank follows a simple recipe. Start from a neutral rate. Add inflation. Push harder for every point inflation misses the target. Push again when the economy runs hot or cold. Set the aggressiveness dial below 1 and the bank stops keeping up with inflation. That is roughly the mistake of the 1970s.
Jobs follow growth. When the economy grows faster than its potential, unemployment falls. When it grows slower, unemployment rises. This is the hinge that turns a financial crisis into layoffs.
Inflation here comes from four places: what people expect, how hot the economy runs, money printed beyond what the economy can absorb, and cost shocks like oil or tariffs. Expectations move slowly while inflation stays polite. Past about 20 percent, they break loose. That break is the cliff edge in the hyperinflation scenario.
Printing a little money does nothing dramatic. The economy has slack. But print faster than the economy can grow, for long enough, and prices follow. At first about a third of the extra money shows up in prices. Once expectations break, almost all of it does.
Banks hold a capital cushion against losses. Unemployment, falling house prices, and leveraged stock crashes eat that cushion. If it runs out, the bank fails. A bailout refills the cushion at taxpayer expense and raises the moral hazard meter, which quietly makes banks bolder in the next cycle. Refuse the bailout and the meter stays clean, but credit gets shredded instead.
Stocks have a fair value tied to earnings and interest rates. On top of that sits a bubble, fed by speculation, borrowed money, cheap credit, and recent gains. The pull back toward fair value is weak, which is the honest part: real bubbles outrun fundamentals for years. The bigger the overvaluation, the more likely the crash.
On gold, the money supply is chained to reserves and the exchange rate is fixed. Interest rates defend the peg, not the economy. A growing economy with fixed money gets deflation. A government deep in debt gets a crisis it cannot print away. Both are on the scenario shelf.
Discrimination locks workers out. That opens a lasting unemployment gap and lowers output for everyone, not just the excluded group. Education feeds mobility and long-run growth. When rents outrun wages, homelessness rises, softened by the safety net. Happiness adds it all up: jobs, stable prices, rising real income, fairness, housing, health coverage, and not currently living through a crisis.
Scenario shelf
Mainstream settings: an independent central bank targeting 2 percent inflation, moderate taxes, insured deposits, open trade. The reference point every other scenario is measured against.
Watch for: Gentle cycles around 2 percent inflation and full employment. This is what success looks like: nothing happening.
Load this scenarioThe government spends heavily, collects little, and orders the central bank to print the difference. Expectations unanchor, and prices stop meaning anything.
Watch for: Inflation compounding on itself once expectations unanchor, the currency collapsing, and happiness cratering even while nominal numbers soar.
Load this scenarioDebt starts at 150 percent of GDP, tax collection is weak, and the currency is pegged, so devaluing or printing your way out is off the table. Bond markets are watching closely.
Watch for: Yields spiking as debt grows, austerity arithmetic failing, and the default event: a bond haircut that wounds the banks holding the debt.
Load this scenarioMaximum speculation and margin leverage, banks with no deposit insurance and no bailouts coming, money pinned to gold. The bubble is not a risk here; it is the plan.
Watch for: The index detaching from fair value, the crash, then the second disaster: uninsured bank runs and a credit collapse that turns a correction into a depression.
Load this scenarioOil quadruples, unions index wages to prices, productivity stalls, and the central bank keeps rates too low because it fears unemployment more than inflation.
Watch for: The textbook impossibility: inflation and unemployment rising together. Then try flipping the Taylor rule on with high aggressiveness and price the Volcker cure.
Load this scenarioRates held near the floor, mortgages above 100 percent of home value, thin bank capital, and heavy property speculation. Bailouts are on, which is its own lesson.
Watch for: House prices outrunning rents and wages, the foreclosure crash landing on bank balance sheets, the bailout, and the moral hazard meter it leaves behind.
Load this scenarioTariffs near 45 percent, trading partners mirroring every one of them back. Protection for a few industries, higher prices for everyone else.
Watch for: Exports and imports both shrinking, tariff revenue never covering the lost trade, and inflation ticking up while growth sags.
Load this scenarioA growing economy chained to a fixed money supply with a high gold cover. Every year of real growth must be paid for with lower prices, and debts get heavier in real terms.
Watch for: Persistent deflation, real debt burdens climbing, and why William Jennings Bryan gave a speech about a cross of gold.
Load this scenarioA maximal fiscal program: universal coverage, a thick safety net, heavy education spending, and 80 percent of the deficit financed by money creation. The theory says idle capacity will absorb it.
Watch for: Happiness and coverage jumping first. Then watch whether inflation stays polite once the output gap closes. The model has an opinion.
Load this scenarioTaxes near 8 percent, spending near 6, no safety net, no minimum wage, no deposit insurance, no bailouts, banks lightly regulated and eager. Growth is real; so is the fragility.
Watch for: Strong average growth punctuated by uninsured bank runs, plus what happens to homelessness, coverage, and mobility when the floor is removed.
Load this scenarioTaxes near 45 percent buying universal health coverage, heavy education investment, strong unions, a generous safety net, and low discrimination. The question is what it costs in dynamism.
Watch for: High happiness, mobility, and coverage. Compare growth and unemployment against Steady State and decide if the trade is worth it. There is no free answer.
Load this scenarioLabor market discrimination at 0.85: a large share of the population walled off from jobs, credit, and schools, with a threadbare safety net behind them.
Watch for: The permanent unemployment gap, mobility collapsing, and the part textbooks underline: total output is lower for everyone, not just the excluded.
Load this scenarioReference
All 41 controls, grouped the way they appear in the control panel. Each note explains what the dial actually moves inside the model.
Taxes, spending, transfers, and how the deficit gets paid for.
Interest rates, the printing press, and the gold standard.
Reserves, capital, deposit insurance, and bailouts.
Speculation and leverage: the raw material of bubbles.
Tariffs, retaliation, openness, and the exchange rate.
Wages, unions, immigration, and discrimination.
Supply, mortgages, speculation, and homelessness.
Who is covered, and what happens to the uninsured.
Oil, productivity, and animal spirits.
One honest note: this is the only page on LocalLedger where the numbers are not real. Everything here comes from a documented, simplified model. The goal is to let you feel how policy works instead of memorizing it. For the real economy, with sources on every figure, start with the state dashboards.