If they had given it to the unemployed and other people on the bottom of the economy, it would have moved into circulation and provided some demand for goods and services. As it is, there is no demand being created, which results in fewer and fewer jobs. It’s a death spiral, a flat spin, that is going to be more difficult and expensive to get out of the longer it goes on.
]]>]]>It is the month of July, in the deep south of Tasmania. It is raining, and the little town of looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit.
Suddenly, a rich tourist comes to town. He enters the only hotel, lays a $100 note on the reception counter, and goes to inspect the rooms in order to pick one.
The hotel proprietor takes the $100 note and runs to pay his debt to the butcher. The Butcher takes the $100 note, and runs to pay his debt to the pig farmer. The pig farmer takes the $100 note, and runs to pay his debt to the supplier of his feed and fuel. The supplier of feed and fuel takes the $100 note and runs to pay his debt to the town’s prostitute that in these hard times, gave her “services” on credit. The hooker runs to the hotel, and pays off her debt with the $100 note to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.
The hotel proprietor then lays the $100 note back on the counter so that the rich tourist will not suspect anything. At that moment, the tourist comes down after inspecting the rooms, and takes his $100 note, after saying that he did not like any of the rooms, and leaves town.
No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism. And that, ladies and gentlemen, is how the United States Government is doing business today.
And it shows what we (Down Under) think of the US economy these days. 😉
Many of the programs they are slashing involve matching Federal money, so they are cutting income more than they are cutting expenses, but they may not know that.
]]>When the state finally paid them, they had already moved on to other things.
They paid me what they owed me, but most of their vendors couldn’t wait on the state to get its act together.
Your landlord and the utility companies won’t wait; your creditors won’t wait; so many people needed bridge loans that the interest rate went through the roof. You can’t treat people like that.
]]>(pardon the French)
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