Deficit Spending

It's been my experience that when my treasury goes negative, all manufacturing and research is shut down (effectively the wheel is set to 100% wealth production) until the treasury goes positive again.

Now whether this applies to the AIs at all levels of difficulty I do not know.

What difficulty level are you playing?

I had to drop down all the way to easy because the AI kept overwhelming me with numbers.  I have decided that you need to have one or two shipyards turning out tiny ships just to keep your military rating up or the AIs will all jump on you.  A peaceful victory seems impossible.

Wael, that all depends on how you bunker your worlds, and how your diplo bonus is doing.

I'm the dominant power in my galaxy, in spite of 3 civs having more military power ( I have *none*), and its been that way for 300 turns, at the beginning of which, I was mid-way on the chart, and Chair of UP.

I've been Chair every time.  Doesn't seem to do anything, though, can't even maintain headquarters anywhere, which is ridiculous.

But I digress.

Peace is totally possible, you just have to be impregnable, and highly diplomatic.

Nah. Just build a ton of diplomatic star bases. Peace victory is ridiculously easy if you can defend yourself for the first 200 turns.

And being in negative credits does not prevent you from using your ships. Just no research or manufacturing.

I never build tiny or small ships.  I generally find enough ships through anomalies to protect myself from pirates while I concentrate on building up my worlds and research.  One or two of the AIs will eventually decide I'm "ripe for conquest" and declare war, but by that time I'm able to build medium hull ships with enough defense and firepower to repel them, and I'm out-producing them by that time.  I also negotiate open borders treaties where possible, milking the minors for 99bc per, but that's not always possible if they're already mad at you.