CONTEST TIME! "How a stimulus package works"

[doodlebug]

Someone always get left out in the end. In this case it is the Hotel Clerk, he ends up with nothing. Just like the stimulus someone will be left with nothing!!

[derf6727]

The only looser in this is the hotel owner. Last person in line on this will always be the looser. Everyone else cleard there debt except the hotel owner.

derf6727

[Peterpam]

Well, right off the bat the hotel/motel owner starts off by STEALING the tourists money! It was never his to begin with as he starts the chain of worthless bill paying. Pretty plain and simple. He took something that was never his.

Best wishes to you, Adam. I enjoy your posts and value your efforts.

Pam Petersen

[jfrost]

From the very start, nothing was ever exchanged between the tourist and the motel owner. If there were was an exchange of good and/or services between the motel owner and the tourist, then motel owner would have earned the money which would actually stimulate a meaningful transaction. The motel owner actually took money that was not his to take which generated an illusion of paying debt without creating anything to show for it. In the end, someone will have to pay for not creating anything from the money that was exchanged.

[Cass]

my thought is why would the hotel manager just let the tourist go upstairs by himself to look at all the rooms and then leave the hotel. The Hotel manager also had no idea whether or not the hundred the tourist put on the counter that went through the entire town would ever make it back to his hotel thus haveing to go in to his own pocket to return the money to the tourist. which just put him back in to debt solveing nothing for that town.

[Soldiering4U]

Seems to me that not only is the debt paid to all but seems like the "Traveler" aka the "Government" seems to not only pay everyone's debt but takes the money back like it always does... the problem with this explanation is that the government took that money from the town's people in the first place so he paid all their debt with their own money instead of letting them just keep their money so they wouldn't have this problem in the first place...

[stavicnar]

Money for nothing and the chick for free

[Basilthyme]

I'll go out on a limb and say the problem with the story isn't in the semantics of how its related or in the moral arguments against government-induced economic-stimuli. The problem as I see it is that the narrative fails to illustrate accurately who the recipients of are of stimulus dollars and who bears the costs.

Seeing as the recent "wall st. bailout" wasn't a true stimulus but a crisis-management package of loans, the most relevant example would be the Bush-era stimulus, wherein most taxpayers received a refund of some 300-1500$. The recipients were members of the lower to middle income brackets; as one's reported income increased the amount of the refund decreased, eventually down to nothing. Government spending is financed only through taxation, or through borrowing, which in turn is repaid with funds from taxation or from inflation (printing money). Bush didn't match his stimulus spending with increased taxes, nor to my knowledge was the government running a surplus at that time, so that particular stimulus was financed through inflation. When financing through inflation, money becomes less valuable, so the cost of the stimulus is borne by everyone who owns dollars.

In the example, the motel/hotel owner was both the recipient of the stimulus dollars and the bearer of its cost (he paid the $100 he received from the prostitute). To make the story a more accurate reflection of real life, a larger swathe of the local economy would have received money from the traveler (maybe he drops his wallet in the street where its found by a group of Pumphandlers) and the whole town would have had to repay it (they discover he is an IRS employee, and rather than bringing the wrath of an audit down upon all of Pumphandle, everyone coughs up a few cents on the dollar and his missing wallet is returned fully restored).

[ardentscientist]

The flaw is North Dakota. It should read Saskatchewan. Google "it is a slow day in the small" and see for yourself. or here's a link http://kanvaso.com/show/3gJK

[gtbailey]

I think I see the point, not sure. To me if the people of the town would work together and barter money would be much less of an issue. Nobody wins in this story. Basically everyone got paid on stolen money because the hundred was never the hotel managers to give.

[KJL]

A stimulis package is supposed to stimulate the economy, that is get the economy going again by getting people to have money with which to buy things again, thereby causing the need to make things. That way you get people working again, people buying again, and thus the economy gets going.

However, in your little story, the economy has not changed at all. It is still a slow day in North Dakota with no one having any money to spend on buying things, which means there is no reason to produce anything, which means no one will go back to work to bring home a pay check to spend on buying more things.

If I recall correctly, when stimulis money was given to everyone via returned income taxes, people were encouraged to spend the money on appliances, furniture, TVs etc. (buying things so more things would need to be produced). And people were discouraged from just paying off their debt as that would only perpetuate the problem which is exactly what happened in your story in Pumphandle, North Dakota.

So as I see it, the flaw in Pumphandle is that the economy was not stimulated at all because no one purchased anything, thereby not causing any merchandise to be produced. The people still had no money with which to buy anything which translates into no need to produce anything which means no jobs for anyone, so no one can make any money to buy anything and so the cycle of economic struggle continues.

[okie4dinar]

This was sent to me via email. I get a LOT of these, obviously... I mean, over 35,000 people have my email address.

I almost responded... but then I thought it would be better if the level headed, intelligent members of DV took a crack at it!

I mean, let's be honest. I can say a lot, but as a group you can all say MUCH MORE. (That's the premise of VIP and getting a better rate to cash in, but I digress...)

So, let's have some fun with this!

Please read the following... and I implore you to find the one serious flaw in this email.

What's at stake?

A FREE VIP MEMBERSHIP FOR TWO PEOPLE.

Yep, that's right! FREE VIP.

I am going to sponsor a 3 month VIP membership to two people:

1. The highest rated response
   
2. The first person to point out what I personally think is the biggest flaw in this "theory".
   

(Yes, this is a completely biased contest that could be considered rigged... whoever plays their cards right the fastest could end up with a HUGE benefit from a free VIP membership!).

On the other hand, you also have a chance to blast a tank sized hole in the logic of whomever wrote this piece of garbage... I think we ALL win here!

WARNING!!!! This is a "Thinking Person's" contest! Ignorant, blind, bleating sheep need not apply!

Here's the email:

Have fun, and may the best and highest rated answer win!

Contest ends in 48 hours.

[okie4dinar]

OK, here is the only serious flaw that I can find...

If a stimulus package would work out EXACTLY like this, it would be wonderful for the economy BUT ...

When the hotel owner took the $100, he had NO WAY of knowing 100% that the $100 was going to go thru the complete cycle and end up back at his establishment to give back to the tourist if the tourist didnt rent the room. What if the butcher didnt care if he paid his debt off to the pig farmer? He is worried about the economy being so bad and out of fear he just pockets the money instead of paying off his debt and then the "circle"wouldve been broken, no ones debt gets paid off except the debt that the hotel owner owed to the butcher The tourist is the victim here... he didnt owe anyone money, but he is the ONLY one that paid here

To summarize...

There is no guarantee that it will work the way you intend for it to, and the only person that gets hurt when it doesnt work correctly, are the innocent ppl that never authorized the use of their money in the first place

[VLICKISS]

The answer is that a co-op is owned by multiple people therefore the co-op guy is stealing from multiple people.

[ardentscientist]

Now I see.. They did not need the money in the first place. They had already payed each other by use of barter with real services to each other as a community. The money here is the illusion that credit can be issued and is perceived as a thing of value which it is not unless it is backed by something of value. However the point being as a community they do not need money to issue credit.

[dizzyval]

1. A hotel / motel owner / opperator / clerk does not ask for any money just to show a room

2. When showing a room to a coustermer would be acompanied by the clerk or another worker, coustermers have a right to inspect befor decideing to stay.

3. Some one must have had a bad dream or was smokeing some wired stuf .

4. I belive some one just really likes to tell stories ,

5. think about it , just like our gov ideals and the way they think ,just blow a lot of hot air and belive that we belive every word and still keep all that they can get from the avgerage person , they really think that we are all dumb. Well thats my worth !!!!!!!!!

[phoenixxxflite]

Every time a transaction occurs a tax liability is incurred. So by the time the transaction returns to the motel owner the value has diminished. As always the great profiteer is always the tax entity!!! Which is why our Government wants stimulus packages in the first place...

[Caducues]

if the flaw of the $100 bill story has not been solved... ill give it a try... What is a hooker doing in pumphandle north dakota?

[Blessing]

It seems to me that it was never his in the first place.

[teedoffed]

There aint no 100.00 hookers in "Pumphandle" ND !!!

[grimreaper]

I do not have the time to read 19 pages of responses but the answer is simple...TAXES. By the time the money got to the hooker there might have been $5.00 left to pay the hotel bill.so the hotel/motel owner/manager would not have had the money to return the his/her customer. So the hotel/motel got sued, went out of business along with the rest of the town. The End

[Matilda]

In a realistic world, you don't put $100 downpayment to inspect hotel/motel rooms then decide not to take one.

As far as the "money" circulating around to pay other ppl's debts, there was no interest, which is unrealistic. In 2011, we ALL pay in the some way, shape or form for other ppl's debts.

[lost one]

Well the hotel owner is the only one that got screwed here, since the motel owner took the 100.00 bill not the hotel owner.

Seems to remind me of our own economy and how they want to fix it.Just keeps going round N round till nobody knows where the money is or commonly known as the SHELL GAME......

[nubbinbug]

One of the fools, probably would have used the money on something else and not paid their debt.

[Mr. Bone]

The one who had the money, left with the money. The town people, although relieved of some debt, will still be surviving on credit tomorrow as no additional revenue in town was generated. The only thing generated was additional credit (by paying down credit) leading to more debt.