10-28-2011, 04:06 PM
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#1
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First Line Centre
Join Date: Nov 2002
Location: Niceland
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How a stimulus package works
Someone sent this to me. I must confess I can't tell if it means that stimulus packages are good or bad.
It's a cold day in the wee Saskatchewan town of Pumphandle...
streets are deserted.....times are tough.....all are in debt......
everybody lives on credit....
A traveler comes to town and lays down 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 into the elevator, the hotel
owner grabs the $100 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 from
the Co-op takes the $100 and runs to pay his debt to the local prostitute,
who, also facing hard times, gave "services" on credit. The hooker rushes
to the hotel ans pays off her room bill with the hotel owner. The hotel
owner places the $100 back on the counter so the traveler will not
suspect anything.
The traveler comes down the stairs, says 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 optimism.
And that, ladies and gentlemen, is how a "stimulus package" works !
__________________
When in danger or in doubt, run in circles scream and shout.
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10-28-2011, 04:11 PM
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#2
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First Line Centre
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That's all assuming everyone borrowed the same amount without interest or inflation taken into account.
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10-28-2011, 04:13 PM
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#3
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Franchise Player
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Isn't the hotel still out $100?
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10-28-2011, 04:15 PM
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#4
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Franchise Player
Join Date: Dec 2007
Location: Oklahoma - Where they call a puck a ball...
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no the hotel guy paid his debt with the 100 bucks to start with ..
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10-28-2011, 04:15 PM
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#5
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Draft Pick
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I like this part
The guy from
the Co-op takes the $100 and runs to pay his debt to the local prostitute,
who, also facing hard times, gave "services" on credit.
what prostitute does that lol
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10-28-2011, 04:16 PM
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#6
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Franchise Player
Join Date: Mar 2009
Location: Calgary
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This thread is stimulating my package.
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10-28-2011, 04:17 PM
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#7
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Franchise Player
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Quote:
Originally Posted by asifka
what prostitute does that lol
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Are you commenting on how unlikely that is or looking for a referral?
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10-28-2011, 04:18 PM
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#8
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Norm!
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Does this thread involve a car battery and alligator clips in anyway, because if it doesn't this thread title is like a major bust.
__________________
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
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The Following User Says Thank You to CaptainCrunch For This Useful Post:
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10-28-2011, 04:22 PM
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#9
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Powerplay Quarterback
Join Date: Dec 2009
Location: SE Calgary
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No one in that town was in actual debt. Everyone owed someone 100 bucks, but at the same time they were all owed 100 bucks by someone in the town.
The net was zero before, it is zero now.
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The Following 4 Users Say Thank You to oilyfan For This Useful Post:
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10-28-2011, 04:31 PM
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#10
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Franchise Player
Join Date: Apr 2003
Location: Not sure
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Quote:
Originally Posted by jar_e
Isn't the hotel still out $100?
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Yes, it is.
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10-28-2011, 04:43 PM
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#11
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tromboner
Join Date: Mar 2006
Location: where the lattes are
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Here's a different take. Spoilered for large pic.
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The Following 5 Users Say Thank You to SebC For This Useful Post:
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10-28-2011, 04:46 PM
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#12
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Franchise Player
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Quote:
Originally Posted by Komskies
This thread is stimulating my package.
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thanks, i came in here looking for such a comment, and you sir have deliverd....
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10-28-2011, 04:47 PM
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#13
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Norm!
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One of the most brilliant Calvin and Hobbes
__________________
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
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10-28-2011, 04:57 PM
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#14
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#1 Goaltender
Join Date: Nov 2002
Location: Richmond, BC
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Quote:
Originally Posted by oilyfan
No one in that town was in actual debt. Everyone owed someone 100 bucks, but at the same time they were all owed 100 bucks by someone in the town.
The net was zero before, it is zero now.
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Yep. The visitor's money was nothing but a catalyst (in the strict sense).
Fun story though. If only it were that easy! 
__________________
"For thousands of years humans were oppressed - as some of us still are - by the notion that the universe is a marionette whose strings are pulled by a god or gods, unseen and inscrutable." - Carl Sagan
Freedom consonant with responsibility.
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10-28-2011, 05:44 PM
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#15
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Powerplay Quarterback
Join Date: Dec 2009
Location: SE Calgary
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Quote:
Originally Posted by GoinAllTheWay
Yes, it is.
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How is it out $100?
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10-28-2011, 08:03 PM
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#16
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Franchise Player
Join Date: Jan 2010
Location: east van
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the hotel was owed a hundred by the hooker, she paid it with the bill which the traveller took, therefore the hotel is out the hookers 100
It does illustrate, inadvertantly how the stimulus is supposed to work though, in reality the towns money supply has been turned back on by the hundred, as all are now free to borrow again, in theory the butcher will get in more pigs with his credit, the farmer will buy more feed etc.
Last edited by afc wimbledon; 10-28-2011 at 08:06 PM.
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10-28-2011, 08:12 PM
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#17
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Lifetime Suspension
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That's not how stimulus works from a keynesian perspective. That is how you avoid a liquidity trap. The alternative to injecting that $100 is that everyone defaults on their debt and no one loans anything to anyone again.
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10-28-2011, 08:55 PM
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#18
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Franchise Player
Join Date: Dec 2003
Location: Sunshine Coast
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Quote:
Originally Posted by afc wimbledon
the hotel was owed a hundred by the hooker, she paid it with the bill which the traveller took, therefore the hotel is out the hookers 100
It does illustrate, inadvertantly how the stimulus is supposed to work though, in reality the towns money supply has been turned back on by the hundred, as all are now free to borrow again, in theory the butcher will get in more pigs with his credit, the farmer will buy more feed etc.
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Not true because the hotel paid off the butcher with the 100. You could even say the hooker's 100 paid off the butcher.
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