Here’s how the economy really works......
A visiting tourist drives through a really small town, stops at a small 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 $100 bill and runs next door and gives the $100 to the butcher to pay his debt.
Now that the butcher has been paid he takes the $100 and runs down the street to pay the $100 to the rancher who supplies his meat.
The rancher takes the $100 and heads off to pay his head cowhand who he owes $100 to.
The cowhand owes his sister money and so takes the $100 and runs to pay his debt to his sister who is staying at the motel.
His sister takes the money and rushes to the motel and pays the motel owner who she owned $100 to.
The motel owner then places the $100 back on the counter so the tourist will not suspect anything.
At that moment the tourist comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves.
The motel owner got $100 from the sister, the butcher got $100 from the motel owner, the rancher got $100 from the butcher, the cowhand got $100 from the rancher, and the sister of the cowhand got $100 from the cowhand. $500 was collected and paid out and everyone was paid and is happy.
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.
Are you related to Krugman or Keynes?
I hate to be an absurdist, but it seems to me that your parable is morally murky, and does not need to be. As described, all these debts got paid off because the motel owner spent $100 that wasn’t really his. A more satisfactory illustration would be for the man to like the room and pay the $100, after which the motel owner spends the $100 and eventually gets it back.
Actually in your scenario, the motel owner loses out. He was paid back his $100 but it was the same $100 that the tourist initially laid down on the desk. So he is technically out $100 - plus he lost a potential customer.