# Step 271: the central specification, every number and figure from one script

**Why.** The second referee report found that the results chapter mixed samples. The Result 3 table
and figures 1–3 came from the original rules (42 cells, 21 distinct), while the text quoted the
step-248 closures. From now on, every result in the text uses one central specification:

- the step-266 firm closure: retained earnings, depreciation 5%, overdraft capped at 50% of output,
  book-value equity;
- the step-268 central government rule: debt cap 90%, surpluses returned once net debt is zero, risk
  premium.

This script produces every number the text quotes for that specification, and draws figures 1–3 in
English and Hebrew from the same runs. Generated by `scripts/central_v271.py`; archived in
`data/processed/central_v271.json` and `figures/*_v271*.png|pdf`. Illustrative; not a forecast.

## Preservation (432 distinct cases)

| Threshold | 80% | 85% | **90%** | 95% |
|---|---:|---:|---:|---:|
| Both displaced cohorts preserved | 240 | 225 | **211 (49%)** | 195 |

With a 120% debt cap: 221.

| Factor | Values | Preserved |
|---|---|---|
| Tax reach | 0.5 / 1 | 30% / 68% |
| Tax rate | 25% / 35% | 41% / 57% |
| Ownership | concentrated / broad | 40% / 57% |
| Pass-through | 0 / 0.5 / 1 | 59% / 53% / 35% |
| Productivity gain | 25% / 50% / 100% | 16% / 44% / 86% |
| Tenure | renters / outright owners / fixed mortgage / reset mortgage | 49% / 56% / 51% / 43% |

## Debt: a correction to step 268

Step 268 said that under the central rule "every case completes". That is true in the model's
accounting, but it hides a fiscal failure:

- In 140 of the 432 cases, existing spending and interest alone push net debt past the 90% cap. In
  110 of them peak net debt is clearly above it (above 95% of output); these are counted as fiscal crises.
- In 48 of them, net debt exceeds twice output, because the risk premium compounds. The worst reaches
  8.6 times output.
- None of the 140 cases preserves the displaced: their benefit is rationed to nothing.

They are better read as fiscal crises than as completed paths. The symmetric rule of step 268 avoids
them by cutting existing spending. In the median case, peak net debt stays at its starting level
(0.61). The benefit is rationed in 187 cases. The government returns a surplus in 164. No case uses
firm credit.

## Relative position (vs status-quo control, final year)

| Cohort | Median | IQR | Range |
|---|---:|---|---|
| Retained workers | +33.3% | +1.6% to +67.4% | −39.5% to +134.7% |
| Capital owners | +75.9% | +38.7% to +128.9% | −8.5% to +243.9% |
| Displaced, no debt | −20.4% | −62.2% to +17.4% | −100% to +78.7% |
| Displaced, with debt | −21.3% | −79.7% to +24.8% | −100% to +98.0% |

Both displaced cohorts end below the control in 58% of cases; retained workers end above it in 77%.

**Timing caveat.** Under the central rule, a government that has paid off its debt starts returning
surpluses. In many controls this happens only in the last year, which makes the final-year control
jump. At year 19 the medians are −16.8% and −18.4% for the displaced. The comparison is sensitive to
when the debt reaches zero.

## Figures

- **Figure 1:** consumption paths in the case with the median gap for the displaced without debt. The
  case is a 25% gain, full pass-through, a 35% tax, full reach, broad ownership and outright owners.
  The displaced keep their consumption until year 9. When the debt reaches the cap the benefit is
  rationed, and their consumption falls to about 60 before recovering.
- **Figure 2:** the final-year gap for each of the 432 cases and four cohorts.
- **Figure 3:** preservation by factor setting.

The step-197 figures are kept in the archive and are no longer used in the text.