This does a solid job of explaining how utterly worthless the porkulus that's helped to bury us under massive debt actually is.
HT: Chicks on the Right.
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 that 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.
And that, ladies and gentlemen, is how a “stimulus package” works.
.
That is EXACTLY how it works!
ReplyDeleteAll the productivity in this example had already occured - it just took a little "stimulus" to get things healthy again.
This is exactly how it doesn't work.
ReplyDeleteThe Stimulus bill was sold as a way to get the country moving again. Since the citizens of East Pumphandle were so kind as to extend each other credit, they had created the liquidity to get their economy moving without government trifling.
The key difference between the Pumphandle example and government micromanagement is the government would require 4,000 pages of reports, and waste at least 9/10ths of the funds in graft and corruption.
So only $10 of the $100 actually entered the economy.