CONTEST TIME! "How a stimulus package works"

[Munsch]

Nobody is gonna dish out rep points for other uses when a VIP spot is based off rep points. Everyone wants that spot for themselves.

<Clears throat> Uhmm I am a nice person and those who beat me to what I had already thought of being some good answers I gave them a "+" for thinking along the same lines as me. I already have VIP so if I get it I would be donating them to family anyway.

[SEB]

Bottom line...........nothing got done.................

[Patty B]

Nobody is better off! Nothing changed! That's the flaw....

[jadaray]

Well, here's the flaw I see - the prostitute's pimp would have wanted a cut, so the prostitute wouldn't have had the full $100 to pay back her hotel manager. It just won't work someone always has to get a finger in the pie LOL

[tuxunder]

With any government stimulus the money has to come from somewhere, either printed or taken from one group and given to another. So while this example is accurate it doesn't tell the whole story i.e where did the original $100 come from. Was it printed by the Fed reserve to supposedly stimulate, if yes then there is a price to pay for that debt, probably China, while at the same time it devalues the currency. If the $100 is transfered from one person to another that doesn't stimulate because who is to say what the original holder would have used the $100 for, chances are he would know better what to do with it than the Government who is picking where the money can be used most efficiently, Government is always behind the times when making such decisions.

Bottom line is that capitalism is the best form of stimulus.

[Jac]

Ho, Ho, Ho and your government wishes you a Merry Stimulus Day!

Yes, sir, GOD BLESS AMERICA!

[Goldminer]

Velosity of money is similar to musical chairs. When the music (money) stops, someone does not have money (motel owner). When the FED (tourist) pulls money from the economy, the music (economy) stops.

[rope]

Nobody is better off! Nothing changed! That's the flaw....

I disagree with you, their credit scores improved, because they paid their debt, now they can borrow more!!!!! And one more thing..........EVERYBODY has a smile on their face, now!

[TBnhispower]

Nothing was "stimulated"! The real problem is the people are ignorant enough to be optimistic about this scenario. It's this kind of optimism that has landed us in this mess in the first place.

[jeffrey]

The flaw in the story is that it was never the hotel owners money in the first place. Therefore he did not have the ability to pay off his debt in the first place.

[Darin]

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.

Here is the problem I believe that will present itself. Nothing was gained and that is the problem. This problem has a high % of repeating itself. With that high %, it'll take another visitor from out of town to slap $100 bill on the desk to clear the debts in the town while he inspects the room. Debts are cleared, but without any additional funds within this town, debts will be built up again.

On a side note, if the prostitute used the room at a rate of $100 to offer her services to the Co-op guy for $100, she gets screwed with or without a stimulus package. She breaks even giving forth her services for free. But I looked at this as maybe she used this room for reasons other than the services she provides. Or, another thing to go against her breaking even is if she offered services to other men in the town using the same room for the night.

Another thing to consider is usually debt has interest that is accrued. Imagine credit cards.. You don't put anything on credit without expecting to pay a little bit more when you pay of the debt. Larger companies offer discounts paid within time frames, but when borrowing money, interest is needed to take into account. This situation fails to put that information at hand. There is a saying that goes.. "A dollar today is worth more than a dollar tomorrow..." Because that dollar could be invested for gains... Banks don't offer out money to receive the "exact" amount back upon repayment...

But to answer the question... The end result didn't NEED a stimulus package for debts to be paid... Everybody was owing $100 and had someone that owed them $100...

Imagine a 3 people... Person A, B, C... Person A owes person B $100, person B owes person C $100, & person C owes person A $100. They could easily say... Well, since this is the scenario and none of us will come out ahead.. Why don't we just forgive the debts, because we'll all break even anyways...

Edited January 28, 2011 by Darin

[KCT]

Okay, I also have another idea. If the prostitute is facing hard times, doesn't this imply she has difficulty paying her bills because of lack of money to do so? If this is true, why would hard times force her to offer services for credit, when she is the one who needs cash to pay her bills? If it had been stated that she understood others were facing hard times and had no cash, it would make sense for her to offer her services for credit as she still wanted to "work." Furthermore, if she were charging someone $100 for what I assume means "something exciting" worth paying for, then the only true "stimulus package" at work in this story is the one she she offered the guy at the co-op!

[hardmoney1]

The traveller first off goes into a MOTEL

At the end of the whole town running around paying everyone else the $100 bill ends up being placed on the counter by a Hotel PROPRIETOR

The Hotel Proprietor has gone in to the MOTEL to pay his DEBT to the MOTEL Proprietor but the traveller believes that the $100 bill is what he placed on the counter in the first place.

It’s all about the juggling of words

Same as maths

3 blokes have a steak, bill comes to $30.

Each man pays $10, waitress rings in the amount finds they have been charged $5 more than should be.

She sticks $2 in her pocket goes back gives each man $1 each

Each man has paid $9

Waitress has $2

3 x $9 is $27 plus the $2 in her pocket equals $29

Where is the other dollar gone?

Now Adam give me that VIP mate

If the men, as you say, paid $5 too much, they actually owed $30-$5 =$25. They then each really only owed $25.00/3= $8.3334.

HOWEVER, they paid $10.00, so subtracting what they should have paid ($8.3334) from what they actually paid, this yields a delta of $1.6667 "Overpaid".

Now, as you say, the waitress "kept" $2.00. This theft was taken from each party, so $2/3 = $0.6667 was withheld from each of them (She must have been a former IRS agent). Remember she had the whole "overpayment" of $1.6667 * 3 = $5.00 in her pocket.

So, as you say, you simply jumbled the words - Subtract the $1.6667 -$0.6667 the waitress had, yields $ 1 to each of the men, and $2 in her pocket. What remains to be seen is if she required any paperwork for the men to get their dollar back!!!

The traveller first off goes into a MOTEL

At the end of the whole town running around paying everyone else the $100 bill ends up being placed on the counter by a Hotel PROPRIETOR

The Hotel Proprietor has gone in to the MOTEL to pay his DEBT to the MOTEL Proprietor but the traveller believes that the $100 bill is what he placed on the counter in the first place.

It’s all about the juggling of words

Same as maths

3 blokes have a steak, bill comes to $30.

Each man pays $10, waitress rings in the amount finds they have been charged $5 more than should be.

She sticks $2 in her pocket goes back gives each man $1 each

Each man has paid $9

Waitress has $2

3 x $9 is $27 plus the $2 in her pocket equals $29

Where is the other dollar gone?

Now Adam give me that VIP mate

If the men, as you say, paid $5 too much, they actually owed $30-$5 =$25. They then each really only owed $25.00/3= $8.3334.

HOWEVER, they paid $10.00, so subtracting what they should have paid ($8.3334) from what they actually paid, this yields a delta of $1.6667 "Overpaid".

Now, as you say, the waitress "kept" $2.00. This theft was taken from each party, so $2/3 = $0.6667 was withheld from each of them (She must have been a former IRS agent). Remember she had the whole "overpayment" of $1.6667 * 3 = $5.00 in her pocket.

So, as you say, you simply jumbled the words - Subtract the $1.6667 -$0.6667 the waitress had, yields $ 1 to each of the men, and $2 in her pocket. What remains to be seen is if she required any paperwork for the men to get their dollar back!!!

[Darin]

Okay, I also have another idea. If the prostitute is facing hard times, doesn't this imply she has difficulty paying her bills because of lack of money to do so? If this is true, why would hard times force her to offer services for credit, when she is the one who needs cash to pay her bills? If it had been stated that she understood others were facing hard times and had no cash, it would make sense for her to offer her services for credit as she still wanted to "work." Furthermore, if she were charging someone $100 for what I assume means "something exciting" worth paying for, then the only true "stimulus package" at work in this story is the one she she offered the hotel proprietor!

Everyone offered a good or service at the value of $100

And maybe it being a small town, the prostitute could offer services via credit since obviously the whole time... Everyone had $100 debt & $100 credit, both that need to be paid & received. Therefore, a stimulus package was not necessarily needed. Everyone could of just said, okay forgive the debts & credits and everyone would of ended up the same in the end...

The transaction of the cash from hand to hand wasn't necessary, but it is perceived to be necessary to pay off the debts.

To simplify it even more, imagine borrowing $100 from a friend who later borrows a $100 from you... It's more like your paying him back than borrowing it to him. Add a 3rd person into the mix where 1 owes 2, 2 owes 3, and 3 owes 1... Than the concept is the same, just debts need to be forgiven.

[estephan]

My opinion is "the guy at the co-op" broke a chain of business related debt repayment. If he played it straight, the story probably doesnt work.

Afterall it did say everyone is in debt, the co-op guy paying his prostitute does not advance his goal , surely there is someone he must pay to insure his financial survival. Poor tart has to wait!

[bwesson]

I'm not sure what is being asked. The only flaw is that the innkeeper started with "borrowed" (stolen) money to pay his debt. Had it not found its way back to him he would have had to pay the stranger from his own pocket or be charged with the theft. As it was the stolen money returned in time not to be noticed gone by the stranger. All else is moot.

[davids11548]

From an invester standpoint: 1. the visitor didn't ask if any rooms were available.

2. no one I ever met would put money on something they knew nothing about, even a

room. without having some idea of the quality of the establishment in question.

3, it's like putting money on a table in a resturant, then going to the restroom.

little chance of it bieng there, when you get back.

It actually is a lot like "O"s big buisness stimulus package.

[0331]

Everyone included in the story is owed 100 dollars and also has a debt of 100 dollars. This makes their net worth 0.

The only man not known to have a debt, is the tourist.

The $100 bill is only used as a temporary "marker" The key to the story is that every one in it owes a debt to eachother.

This alows them to be organized into a linear fashion, and settle their debt with one another by canceling each others debt.

The same bill pays off hundreds of dollars of debt, But noone ends up with the 100 dollar bill because eveyone, other than the tourist, had a net worth of 0.

Sorry if this has already been said. I didn't have time to read the responses. I had to start typing while I understood what I was thinking.

[NMGarand]

No work or service was contracted between the hotel owner and the tourist. There was no increase in business

and no job was created. The hotel owner borrowed the money to improve his debt situation and started a chain of

debt payment that returned back to him. In a roundabout way all current debt was forgiven,and the community

worth did not increase by $100. The community net worth decreased by $500 which was the debt that was forgiven

in the roundabout way. That's how our current debt is being paid by the government. We have had our hard

currency industries lured out of the USA by our own legislation and bribed officials in high places. We ourselves

are participating in passing the buck round and round a closed loop cycle. We need hard currency industry to

break the cycle.

NMGarand

[estephan]

I'm not sure what is being asked. The only flaw is that the innkeeper started with "borrowed" (stolen) money to pay his debt. Had it not found its way back to him he would have had to pay the stranger from his own pocket or be charged with the theft. As it was the stolen money returned in time not to be noticed gone by the stranger. All else is moot.

Ha Ha now wait a minute, This is PUMPHANDLE!!! Ya gothere and throw $100 on the counter and leave??? cash is king and if ya dont like it they wont care

[drive4821]

Everyone got screwed.......... and the prostitute and the guy that owed her were the two that got screwed twice!

Actually it's like Fort Knox........there is SUPPOSED to be something of value that back up that debt that was paid.................sadly, the "tourists" have taken it all with them and our currency isn't backed by anything of value!

[bumblebee13]

I am thinking that the flaw is that the tourist is Chinese and he owns everyone's debt just like the real world. Not sure if there is a Walmart in Pumphandle, but that could play into it as well.

[bikertrash]

There would have been no reason for the traveler to have put money down just to go look at the rooms.

[keylime]

Seems to me the one person who wasn't completely paid back was the "Prostitute". You tellin' me either the ONLY person in that town that obtained her "services on credit" was the Co-op guy? Or was he the only person in town who "Used" her services, in which case she should have been "out of business" a long time ago. So actually, the Prostitute was only "partially stimulated." And that just don't hold water.

[echo0marie]

The problem I see with this is that the motel guy really would not use that 100 bucks to pay off a debt, he would use it for something else... LMAO I know I would HAHA