The Federation of Penaconia is a massive, safe nation, ruled by Caelus with an even hand, and remarkable for its museums and concert halls, multi-spousal wedding ceremonies, and state-planned economy. The compassionate population of 1.765 billion Penaconians are fiercely patriotic and enjoy great social equality; they tend to view other, more capitalist countries as somewhat immoral and corrupt.

The large, corrupt, socially-minded government prioritizes Defense, although Education, Administration, and Industry are also considered important, while Spirituality receives no funds. It meets to discuss matters of state in the capital city of Libertaria. The average income tax rate is 90.1%, and even higher for the wealthy.

The frighteningly efficient Penaconian economy, worth 285 trillion Penaconian Marks a year, is driven entirely by a combination of government and state-owned industry, with private enterprise illegal. The industrial sector, which is fairly diversified, is led by the Arms Manufacturing industry, with significant contributions from Information Technology, Tourism, and Book Publishing. Average income is an impressive 161,704 Penaconian Marks, and distributed extremely evenly, with little difference between the richest and poorest citizens.

Signatures have been replaced with illegible scribbles, Eau de Trashcan has become a wildly popular perfume, an endless multinational bureaucracy connects the Red Bloc, and internal strife within the Red Bloc crumbles in the face of fiery rhetoric. Crime, especially youth-related, is totally unknown, thanks to a capable police force and progressive social policies in education and welfare. Penaconia's national animal is the Spinosaurus, which is also the nation's favorite main course, and its national religion is Socialism.

Penaconia is ranked 188,829^th in the world and 64^th in Union of Allied States for Largest Insurance Industry, scoring 135.81 on the Risk Expulsion Effectiveness Rating.