Stimulus Package Economics

[cassidyta]

It is a slow day in the small Saskatchewan town of Pumphandle, and 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.


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 looks to the future with a lot more optimism.


And that, ladies and gentlemen, is how a Stimulus package works.