Slow Day In Texas

(This is not about the main cause of the great recession. But it shows how the credit markets can affect the real economy.)

It’s a slow day in a little East Texas town. The sun
   is beating down, and the streets are deserted. Times
   are tough, everybody is in debt, and everybody lives on
   credit. On this particular day a rich tourist from
   back east – is driving through town.

   He stops at the motel and lays a $100 bill on the desk -
   saying he wants to inspect the rooms upstairs in order to
   pick one to spend the night.

   As soon as the man walks upstairs, the owner grabs the bill and
runs next door to pay his debt to the butcher.

   The butcher takes the $100 and runs down the street to
   retire his debt to the pig farmer.

   The pig farmer takes the $100 and heads off to pay his bill at 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 had to offer her “services” on
   credit.

   The hooker rushes to the hotel and pays off her room bill
   with the hotel owner.

   The hotel proprietor then places the $100 back on the
   counter so the rich traveler will not suspect anything.

   At that moment, the traveler comes down the stairs, picks
   up the $100 bill, states that the rooms are not
   satisfactory, pockets the money, and leaves town.

   No one produced anything. No one earned anything.

   However, the whole town is now out of debt and now looks to  the
future with a lot more optimism.
   And that, ladies and gentlemen, is how the United States
   Government is conducting business today.