Stimulating the economy

Money clipartIt is a slow day in the small Dakota town of Pumphandle and streets are deserted. Times are tough, everybody is in debt and living on credit. A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Co-op.

The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her “services” on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner. The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves. No one produced anything. No one earned anything… However, the whole town is now out of debt and looks to the future with a lot more optimism.

And that, ladies and gentlemen, is how a “stimulus package works. 

Thanks Russ

7 thoughts on “Stimulating the economy”

  1. It would be nice if it actually worked that way, however, you are missing the part where the government takes about %22 out of each transaction. This means the Motel Owner puts $28.87 back down on the counter at the end and that’s what the Tourist leaves with. The Tourist, of course, being the US taxpayers since, as you well know, that is where the .Gov gets it’s money.

    PS. because money gets taken out with each transaction, it also means that not everyone is paid the full debt they are owed. Hmmm…Maybe another stimulus would make it all better.

  2. You are also missing the part where the tourist got the money. The motel owner, the butcher, the farmer and the hooker all had to send him $25.00 to go on vacation…

  3. That is the way the economy is supposed to work, the movement of money. If you have too much and do not move it, the economy suffers.

    If you do not have enough and pretend to move lots of it, you create a recession.

    Economics 101.

  4. Well, they all had a 100$ debt and a 100$ credit. Net worth 0$
    After the tourist leave, they all have the same worth, so the future isn’t exactly more bright isn’t it?

Comments are closed.