How our economy works:
It’s a slow day in Gulargumbone ( small place in Australia)
The sun is beating down, and the streets are deserted.
Times are tough, everybody is in debt, and everybody lives on credit…..
On this particular day a rich tourist from Sydney is driving through town.
He stops at the motel and lays a $100 note on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.
As soon as the man walks upstairs, the owner grabs the $100 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 at the supplier of feed and fuel.
The guy at the Farmer’s 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 rich Traveler will not suspect anything.
At that moment the traveler comes down the stairs, picks up the $100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.
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.