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Does anyone really need a degree in economics?

A wealthy traveler drives into the sleepy hamlet of Dunsmuir, Ca. looking to do some fishing in the world class fisheries along the upper Sacramento river, which also is a hotspot for rail-fanning.

The economy was in the dump and everyone lived on credit.

Only one motel with a vacancy, so the traveler puts a good faith $100 bill on the counter saying he wanted to see the rooms before booking, suspecting a flea trap.

Only room in town, and sure of a sale, the hotel owner dashes next door to pay the butcher bill with the C-note for the meat for the restaurant that served last week.

The butcher then races to the rancher and pays his bill with the Benjamin.

Rancher settles to pay off the local prostitute.

Then she runs to the hotel to pay for her room that she used last week on credit and she puts the C-note back on the counter.

The traveler then walks down the stairs saying the room wasn't satisfactory, picked up his C-note and drives out of town.

Economic woes settled in full, everyone gets a better credit rating and now can repeat the cycle.

3 Answers

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  • Anonymous
    6 years ago

    This is really not as complicated as it sounds. The basic premise is that you have four people, each of whom owes one other the same amount of money (with the exception of the traveler who is owed $100). Thus, each person has a $100 debt and a $100 asset, so each person's ultimate value is $0, and the traveler's value is $100. Each person other than the traveler had $0 at the beginning and each person had $0 at the end. The traveler had $100 at the beginning and had $100 at the end.

    The only thing missing is that the hotel owner began the cycle by stealing the traveler's $100, which he had not yet earned. Had the debt/asset ratio not been equal for every participant, you would have to add a police officer to the scenario. As stated, ultimately there is no change in any participant's economic status.

  • ?
    Lv 7
    6 years ago

    That sounds like what the libs call trickle down economics. If that $100 had been taxed away everyone would still be in debt.

  • Anonymous
    6 years ago

    Yes.

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