GREAT
POST!
Posted on 04/16/2020 10:02:40 AM PDT by IamConservative
It's a slow day in the small town of Bumford, Indiana and the streets are empty. Times are tough, everybody is in debt, and everybody is 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 prostitute 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 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!
Nobody needed to produce anything, but they needed a bit of liqued cash to facilitate the cancellation of the debts.
That was part of the problem in the great depression. The government *reduced* the money supply, so no one had any money to use to pay their debts. It was one of the reasons the depression dragged on so long. That and the uncertainty created by President Roosevelt, who changed laws like most people changed socks.
GREAT
POST!
This only works in a system where no one is a net debtor or creditor. In such a system, cancelling all debt has no effect on anyone’s net worth. In real life some people are net debtors, others creditors. Canceling all debt leaves some people richer, others poorer.
The best advice anyone ever game me: Avoid debt.
they could have done the same with a simple IOU
Also.. what prostitute works ‘on credit’???
The prostitute buys clothes, food and some dope then rushes to the hotel and pays off her room bill with the hotel owner with a quickie.
Oops
Absolutely correct. The joke is simplistic because … well, it’s a joke.
But I do maintain that with the US in debt for $24T or so, and the world in debt for something like $200T, it is impossible to pay the debts off. Everybody owes everybody and it’s a mess.
I think there will be a general default and a global financial reset. And there will be pain, because it’s not like in the joke, and there are net creditors who won’t get what they are owed. But I think those people are a big part of the problem (I’m thinking Central Banks here). They would get screwed by a general default. And maybe I’m OK with that.
The traveler injected liquidity into the market at a 0% rate.
Times were tough, but she too was extended credit. 8>)
His name was Powell, head of the Fed.
You forgot to mention that the "tourist" was also a counterfeiter, because he was in reality just as broke as the rest, to represent the Federal Reserve that authorizes the mints to print up additional money to make money available.
Otherwise, that is exactly how it works, but everyone is happy and indeed have paid off their debts. Well actually they have transferred their debts to everyone else who are on the hook because the money must be repaid to satisfy the creation of the extra money injected into the economy. Which is how we can become 23 trillion in debt. 8>P
The hotel owner still hasn’t been paid for the room the prostitute used.
He thinks he has. Which is what the whole financial “system” is all about.
Sure he did. It’s just that he borrowed the money from the man, and so he had to pay him back. But in turn he got to pay his debt owed. He couldn’t have done that if he hadn’t done a short term loan from the man, even though the man had not consented to the loan. 8>)
Would have worked if the Hotel owner kept the $100 as a non refundable Room Inspection Fee.
Of course, how long did the guy take to inspect the Rooms? All those other People running around paying off their Debts would have taken hours.
I know, it’s just a Joke. It’s like when my older Brother took me to see Bullitt at the Movie Theater when I was a Kid. As we walked out he says, too bad that Dodge Charger lost FIVE Hubcaps during the Chase. Ruined the Movie for me. LOL
Yes just a joke, but a clever one also. 8>)
The thing I remember about Bullitt in the big theater was how I could not stop my stomach from reacting to the car jumping leaving the road when he had traversed over the crest of the hill, even though I was not physically in the car. Just not the same on smaller screens. 8>)
This has started around in emails again - I forget when it first came out but it’s still priceless..
“”Also.. what prostitute works ‘on credit’???””
I hope you’re not asking for particulars like names and locations.
“Also.. what prostitute works ‘on credit’???”
Give it a minute. There’ll be multiple responses of “my ex-wife” from various FReepers.
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