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Subject: ... elementary lesson in economics ...

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Dave Smith    Posted 03-25-2019 at 15:51:53 [URL] [DELETE]        [Reply] [Email]  
  • ... elementary lesson in economics ...
  • ... elementary lesson in economics ...

    It's a slow day in the small town of Pumphandle, Saskatchewan, and the streets are deserted. Times are tough, everybody is in debt, and everyone is living on credit.

    A tourist visiting the area drives through town, stops at the motel, and lays a $100.00 bill on the desk, saying he wants to inspect the rooms upstairs to choose 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 $100.00 and runs down the street to retire his debt to the pig farmer.

    The pig farmer takes the $100.00 and heads off to pay his bill to his supplier, the Co-op.

    The guy at the Co-op takes the $100.00 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 $100.00 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 now thinks that they are out of debt and there is a false atmosphere of optimism and glee.

    And that, my friends, is how a "government stimulus package" works ...

    Island Mike    Posted 03-25-2019 at 23:26:11 [URL] [DELETE]        [Reply] [Email]  
  • Re: ... elementary lesson in economics ...
  • The story does have a a measure of truth. It is called the multiplier affect in economics. Money goes around about 3 or 4 times in the real world. Due to the costs on the way as stated below.
    Which would get as far as the hooker, who would gave to arrange some other form of payment with the hotel.
    Lots of nice folks in Saskatchewan, but is is really flat.

    Island Mike

    Bruce(OR)    Posted 03-25-2019 at 22:54:06 [URL] [DELETE]        [Reply] [No Email]  
  • Re: ... elementary lesson in economics ...
  • One minor exception (possibly) being that now they all had to report income and pay taxes on the money. 5 people paying taxes (should) give all that money back to the feds.
    Thank you. However as the national debt was raised to do the stimulus, all seems to have done was inflate the bubble even more.
    So instead of little growth spurts, now you have a large burst of air into the balloon.
    Got a needle?

    2NTony    Posted 03-25-2019 at 20:23:07 [URL] [DELETE]        [Reply] [Email]  
  • Re: ... elementary lesson in economics ...
  • Exactly so.

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