Posted on 02/16/2014 3:31:12 PM PST by workerbee
Stay with this one. It is good (makes sense).
It's a slow day in the small town of Pumphandle and the streets are deserted. 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.
(Stay with this..... and pay attention)
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 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!
But the local liquidity jumped for a moment!
totally agree even the prostitute had some expenses
my point was the only one that got to sit and do nothing but wait for their check was the IRS and they produced nothing
every one of the others was producing something then running around to cover each other
I would have the tourist be the federal tax collector that takes 20 bucks from everyone under threat of imprisonment and after a long day of stealing from the citizens decides to go to the hotel...
Well, done sir.
Well...why don’t you explain to us rubes how government stimulus works, then?
Sure. Give me a hundred bucks.
Whether it’s worth $100 depends upon the answer, of course...I guess there is a limit to your pro bono know-it-allism.
Another possibility, hopefully more likely, is a limit to one’s “rubeness.”
The analogy I always use is a swimming pool. The stimulus is like pumping water out of the deep end into the shallow end, and expecting to fill the pool. Of course, along the way, water spills and evaporates—that would be the petty bureaucrats pocketing their share along the way.
Since originally posting this analogy on FR several years ago, I have heard Rush use it. Great minds think alike!
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