Help. Got this in an email. Can anyone shoot holes in it?

Stimulus Example
It is the month of June, on the shores of Lake Michigan. It is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit.

Suddenly, a rich tourist comes to town.

He enters the only motel, lays a $100 bill on the reception counter, and goes to inspect the rooms upstairs in order to pick one.

The motel proprietor takes the $100 bill and runs to pay his debt to the butcher.

The Butcher takes the $100 bill, and runs to pay his debt to the pig grower.

The pig grower takes the $100 bill, and runs to pay his debt to the supplier of his feed and fuel.

The supplier of feed and fuel takes the $100 bill and runs to pay his debt to the town's prostitute that in these hard times, gave her "services" on credit.

The hooker runs to the motel, and pays off her debt with the $100 bill to the motel proprietor to pay for the rooms that she rented when she brought her clients there.

The motel proprietor then lays the $100 bill back on the counter.

At that moment, the rich tourist comes down after inspecting the rooms, and takes his $100 bill, after saying that he did not like any of the rooms, and leaves town.

No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism.

And that, ladies and gentlemen, is how the United States Government is doing business today.

Total ignorance.

stimulus funds, not being shown those funds. :crazy:

give it up for free or future payment.

Just for my own education on this matter, mind you.

Yeah.Thats it,I read it.
Thats my story and I'm sticking to it.

:rofl:

People who send this kind of BS are incapable of using logic and reason and unwilling to try.

We'll get it back to them before they even notice it's missing. But waiting for a rich person to plunk down some of their money is a fool's errand. We'll just extract it in taxes. Then we'll re-pave a road with the money. The flagger for the road crew will then get paid $100, and run to pay for his kid's child care. It'll go from there, and eventually make it back into the rich person's pocket.

And at least we'll have a freshly paved road to show for it.

We resolve the problem by agreeing to forgive both debts.

That's exactly what this dumbass's story involves, only less complicated.

There's also nothing wrong with it, nor is it any analogy to the stimulus.

It's about economics, not "how the United States Government is doing business today". The stuff about the stimulus and the last line were tacked on to it -- the rest of this parable is at least 30 years old.

Like it or not, a huge amount of our economic world is built on the transfer of promises. This creates wealth because in order to benefit from those promises, people must do productive work (i.e., not just making more promises).

Between what I just wrote, and the parable itself, this is all a reduction to absurdity, but it does illustrate the concept behind the process. The added-on editorials are the products of wingnuts. And within a week, this will all be attributed to the late George Carlin, anyway.

--d!

They earned it previously, and it was paid ON CREDIT.

The butcher earned the $100 from the motel proprietor when he sold him meat.

The pig grower earned the $100 when he sold his pigs to the butcher.

... and so on...


They didn't collect at the time the service was rendered or product sold... but they definitely earned it.



That's the fatal flaw in the logic of this email...

are called "pig growers"

You should suggest to the person who sent it to you that they finish their education beyond the fourth grade.

they're either out of business or have to borrow more.

whatever the hell it is you plant to grow pigs.

using stimulus money? Cuz then it would be more like how the government works.

It's a description of how a debt driven economy works. A very elementary one, but the rich man in this little story is playing the role of banker, not the government.

seems to be based on the concept, once popular, that every NEW dollar in a given area goes around about 7 times.

In a small town where everyone knows everyone else pretty well, it is entirely conceivable that even a hooker would extend credit from time to time--particularly when times are slow.

The rich tourist simply laid down the cash--a sort of escrow I guess--and the inn keeper spent it. There was never any agreement to provide services for payment or to accept the $100 as a gift--which would represent the stimulus--so the inn keeper basically stole the hundred bucks.

I guess that's the moral of the story; Republicans can't make anything work without committing a crime first.

On edit: It also assumes that credit is free which we all know even when it appears to be, it isn't.

... always make them explain themselves. Never ever accept the premise of whatever the hell they're spouting.

In the example you've given, the first question would obviously be: are you always this stupid?

Forget the storyline. The key is that the appearance of the "rich tourist" is completely irrelevant to the story.

The real story is:

A owes B $100
B owes A $100

They agree to forgive each others debt.

End of story.

That the chain is actually A -> B -> C -> D and so on is also irrelevant.

That the parties all agree to forgive each others debt and are now "debt free" is also wrong. None of them were ever IN debt. The debts owed to each by some other are ASSETS to the person owed. ASSETS - DEBTS = NET WORTH. Since everyone (again, forget the tourist) owes $100 AND was owed $100, no one was ever actually IN DEBT. They all had a net worth (for this story) of $0.

End of story.

And, no, this is not the situation that we, as a nation, are in, nor is it the way the government is operating.

I was going to post something similar, but you have removed the need. Great explanation.

That's how the economy is being by our government now.

For one thing, a bunch of them 'earned' something. They earned it in the past and only now are actually getting paid. Again, how is that a bad thing? That's how the economy works, money circulates. Getting rid of $100 in debt makes you $100 richer and so does having somebody pay back the $100 they owe you. Your balance sheet is improved on both ends.