The Current State of the Federal Government

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  • Woodwerker
    Established Member
    • Nov 2005
    • 490
    • .

    #1

    The Current State of the Federal Government

    It is a slow day in the East Texas town of Madisonville.
    It is raining, and the little town looks totally deserted.
    Times are tough, everybody is in debt and everybody lives on credit.
    On this particular day a rich tourist from the East is driving through town.
    He enters the only hotel in the sleepy town and lays a hundred dollar bill on the desk stating he wants to inspect the rooms upstairs in order to pick one to spend the night.
    As soon as the man walks up the stairs, the hotel proprietor takes the hundred dollar bill and runs next door to pay his debt to the butcher.
    The butcher takes the $100 and runs down the street to pay his debt to the pig farmer.
    The pig farmer then takes the $100 and heads off to pay his debt to 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 lately had to offer her "services" on credit.
    The hooker runs to the hotel and pays off her debt with the $100 to the hotel proprietor, paying for the rooms that she had rentedwhen she brought clients to that establishment.
    The hotel proprietor then lays the $100 bill back on the counter so the rich traveler will not suspect anything.
    At that moment the traveler from the East walks back down the stairs, after inspecting the rooms.
    He picks up the $100 bill and states that the rooms are not satisfactory...... Pockets the money and walks out the door and leaves town.
    No one earned anything. However the whole town is now out of debt, and looks to the future with a lot of optimism.
    That, ladies and gentlemen, is how the United States Government is conducting business today.

    If that doesn't scare you, then I don't know what will.
    Every tool you own is broken, you just don't know it yet :-)
  • tommyt654
    Veteran Member
    • Nov 2008
    • 2334

    #2
    Yup, Thats how its been done for 40 yrs or more.

    Comment

    • Salty
      Senior Member
      • Feb 2006
      • 690
      • Akron, Ohio

      #3
      Makes ya a little light headed just thinking about it.
      Why doesn't the word 'planing' show up in my computer spell check?

      Comment

      • cgallery
        Veteran Member
        • Sep 2004
        • 4503
        • Milwaukee, WI
        • BT3K

        #4
        There are prostitutes that extend credit?

        Comment

        • Gator95
          Established Member
          • Jan 2008
          • 322
          • Atlanta GA
          • Ridgid 3660

          #5
          economic multiplier in action.
          the $100 gets back to the government, and it flowing thorough the system restored liquidity.
          what part of that story scares you?

          Comment

          • germdoc
            Veteran Member
            • Nov 2003
            • 3567
            • Omaha, NE
            • BT3000--the gray ghost

            #6
            I would say the farmer's coop guy made out really well. Kind of like the investment bankers of today...
            Jeff


            “Doctors are men who prescribe medicines of which they know little, to cure diseases of which they know less, in human beings of whom they know nothing”--Voltaire

            Comment

            • crokett
              The Full Monte
              • Jan 2003
              • 10627
              • Mebane, NC, USA.
              • Ryobi BT3000

              #7
              Originally posted by Gator95
              economic multiplier in action.
              the $100 gets back to the government, and it flowing thorough the system restored liquidity.
              what part of that story scares you?
              That is what I was wondering. Everybody is out of debt and now can go about keeping what they earn again. And it is not true that 'no one earned anything'. Everybody got paid for services they rendered previously but had not received payment for. Everybody owed somebody else, that is why they couldn't keep the money. Supposing the butcher doesn't extend credit to the hotel owner. Then no one comes to the hotel because there is no food so it closes. The prostitute has no place to conduct business so she leaves. Meanwhile the butcher loses his biggest customer and has to close, as does the pig farmer who sells his land to developer. The feed dealer also closes, all because their small business could not get credit. Now THAT is scary.
              David

              The chief cause of failure in this life is giving up what you want most for what you want at the moment.

              Comment

              • LCHIEN
                Super Moderator
                • Dec 2002
                • 21978
                • Katy, TX, USA.
                • BT3000 vintage 1999

                #8
                the problem with this story is that everyones credits and debts are equal.
                So once the books are balanced its all wiped clean.
                In real life everyone's debts far exceed the credits they have coming. There's the real problem.
                Loring in Katy, TX USA
                If your only tool is a hammer, you tend to treat all problems as if they were nails.
                BT3 FAQ - https://www.sawdustzone.org/forum/di...sked-questions

                Comment

                • Alex Franke
                  Veteran Member
                  • Feb 2007
                  • 2641
                  • Chapel Hill, NC
                  • Ryobi BT3100

                  #9
                  This story makes me want some NC-style BBQ. This, I suppose is clear show of support for prostitution. (sigh) Good thing I don't ever plan to run for office
                  online at http://www.theFrankes.com
                  while ( !( succeed = try() ) ) ;
                  "Life is short, Art long, Occasion sudden and dangerous, Experience deceitful, and Judgment difficult." -Hippocrates

                  Comment

                  • poolhound
                    Veteran Member
                    • Mar 2006
                    • 3196
                    • Phoenix, AZ
                    • BT3100

                    #10
                    Originally posted by Gator95
                    economic multiplier in action.
                    the $100 gets back to the government, and it flowing thorough the system restored liquidity.
                    what part of that story scares you?
                    Agreed. What this amusing little story illustrates is basic economics and it is the essential way economies have worked since man first traded his first flint axe head.
                    Jon

                    Phoenix AZ - It's a dry heat
                    ________________________________

                    We all make mistakes and I should know I've made enough of them
                    techzibits.com

                    Comment

                    • 430752
                      Senior Member
                      • Mar 2004
                      • 855
                      • Northern NJ, USA.
                      • BT3100

                      #11
                      Very well said, the federal government is operating due to a rich tourist from the East. Namely the Chinese. I guess they must own about half our debt now. God(s) help us when they decide to quit buying our debt, like they've been threatening to.

                      Still, if the presidents after 1980 (the time when national debt took off) hadn't been increasing national debt at alarming rates, we wouldn't need the asians. Well, at least we can start the opium wars all over again to destablize them. Oh, I forgot, we've been trying that.
                      A Man is incomplete until he gets married ... then he's FINISHED!!!

                      Comment

                      • vaking
                        Veteran Member
                        • Apr 2005
                        • 1428
                        • Montclair, NJ, USA.
                        • Ryobi BT3100-1

                        #12
                        Federal Government is smarter that that. In this story rich traveler provided short-term credit to the town. At the end he got his money back. Federal Government provided short-term credit and tfor it is getting sizable equity stake in few major industries. Everything says the smart government will make a very nice profit on it.
                        Alex V

                        Comment

                        • cwsmith
                          Veteran Member
                          • Dec 2005
                          • 2805
                          • NY Southern Tier, USA.
                          • BT3100-1

                          #13
                          Actually there's nothing scary about this story. That's how the economy works. Basically it's only a matter of perception.

                          I was born in 44', in the midst of a war when almost everything was being rationed for the war effort. As I grew up, I heard stories from my parents and grandparents about how terrible the "Great Depression" was.

                          So, I've often wondered... If during the Great Depression, most of America was out of work, banks were closed, and businesses folded, and most Americans had little faith in the future, because there was NO Social Security, unemployment benefits, etc. The government was on a "shoestring" and tax collection was "in the cellar"! So, how was the government able to start those "social" programs, establish the CCC (Civilian Conservation Corp), the TVA (Tennesee Valley Authority), etc.; and then still afford to go to WAR!?

                          How with so much debt did we take on every available male, put a uniform on him, pay him a wage, provide him with all the necessities of war, investing in new research and developement, new manufacturing, munitions, thousands of airplanes, tanks, ships, artillery, mines, bombs, and bullets costing millions of $ to win the war and bring it to a successful and triumphant conclusion... Then afterwards pay for the rebuilding of Japan and Europe, enter a cold war, an arms race? And, don't forget about three decades of economic growth in our coutry's civilian economy with new housing, automobiles, household appliances, and toys for our children and ourselves! New highways, bridges, buildings, shopping malls and parks!

                          Bottom line, we went from the national poverty of the 30's to become overwhelming weathy through the 50's, 60's, 70's, etc. So, where did the money come from???? We simply imagined it, believed it, and then manufactured it to meet the demands of a public that didn't give it a lot of thought. Money is not backed by limited and fixed resources of gold or silver, it is backed by the imagination of consumers in an economy that is perceived to be growing. Likewise, if the perception is that things are failing... then so it goes.

                          CWS
                          Think it Through Before You Do!

                          Comment

                          • Tom Slick
                            Veteran Member
                            • May 2005
                            • 2913
                            • Paso Robles, Calif, USA.
                            • sears BT3 clone

                            #14
                            The problem with this story is it assumes the businesses only had one customer that they sold good/services to at cost and one debt. following this concept of one debt:
                            When the hotel paid the butcher the butcher made a profit.
                            The butcher paid his bill in full with the pig farmer, the butcher can still collect from his other customers, he'll then have cash and no debt for the moment.
                            The pig farmer then pays in full the co-op, and still can collect...same situation as the butcher.
                            The co-op, same situation as the butcher.
                            The prostitute, same situation.
                            The only people who didn't make a legitimate profit in this story is the hotel because of a lost sale but he has paid his debt, albeit dishonestly, and the tourist but the tourist never intended to make a profit.
                            This is normal economics during good or bad times, every business operates with credit.

                            The real way to know this is a made-up story is a rich tourist in Madisonville
                            Last edited by Tom Slick; 06-16-2009, 02:50 PM.
                            Opportunity is missed by most people because it is dressed in overalls and looks like work. - Thomas Edison

                            Comment

                            • conwaygolfer
                              Established Member
                              • Jun 2008
                              • 371
                              • Conway, SC.
                              • BT3000

                              #15
                              NC Barbeque

                              Originally posted by Alex Franke
                              This story makes me want some NC-style BBQ. This, I suppose is clear show of support for prostitution. (sigh) Good thing I don't ever plan to run for office
                              Just curious - is it vinegar base? mustard base? tomato base?
                              Personally, I like vinegar base.

                              Later,
                              Conwaygolfer

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