Finally, an Answer to Our Debt Problem! Do You Find the Flaw?

“It is a slow day in a damp little Irish town. The rain 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 German tourist is driving through the town.

He stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner gives him some keys. As soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.

The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the feed store. The guy at the feed store takes the €100 note and races to pay his bill at the pub. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit.

The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveler will not suspect anything.

STDs can cause scaring in the cheap cialis from india tube, ectopic pregnancy and other reproductive problems. http://foea.org/wp-content/uploads/2014/10/FEA-Newsletter-Feb.-2010.pdf cialis 40 mg This could represent the end of his professional career in the MLB. Men are afraid of going through these horrid cialis generico mastercard truths about likely inability to maintain an erection as it avoids the relaxation of the muscles around the male’s genital organ. Basil or sabja seeds are generic uk viagra the main ingredient of Kamagra and it also has all the ingredients that have been added to make Lawax capsules. At that moment the traveler comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town. No one produced anything. No one earned anything. However, many people in town are now out of debt and looking to the future with a lot more optimism. And that, Ladies and Gentlemen, is how the bailout package works.” From samizdata.net, slightly modified by catholicfundamentalism.com

So, why wouldn’t that work? It is, after all, the thinking behind every bubble from Mississippi to the South Seas and every similar scheme from Ponzi to Madoff. It describes perfectly what happens when Tulip Mania possesses a nation, driving sanity away. We can picture that Irish town, and the people in the town that paid their debts with the single 100 Euro note. But, what happens if the rich German tourist would come back into town every day, doing the same thing while looking for a suitable room? As long as everyone had legitimate debts, they would be paid. The debt side of the town’s collective balance sheet would look better after every visit, though the innkeeper, the man at the end, would be perpetually out of luck. So, why not alternate the man at the end of the line?

The bigger problem is that one of the townspeople, or many of them, will eventually take the money and leave without paying his debt. Then, the whole house of card falls apart. In the Mississippi bubble, transferring paper caught a nation up in instant wealth. Then, a few people exchanged paper for precious metals. Many of them left France. The house of cards that was France’s economic system collapsed. In the same way, the same thing must happen in any system that gives people the freedom to leave.

If people are not allowed to leave, are they different than slaves?

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