Friday, November 4, 2011

How a government stimulus package works

It’s a cold day in the small town of Bugtussle and the streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.A traveller comes to town and lays a $100 bill on the hotel desk, saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the hotel 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 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 is now out of debt and now looks to the future with a lot more optimism. That, ladies and gentlemen, is how a "stimulus package" works.

Thanks and a tip of the toque to Agent 6.

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