Voodoo Economics

Below is a message from a member of our group that maybe even out does the recent message re the dimwitted bar owner who goes bankrupt following similar economic policies as our country has the past several months.   

 

To our member who replied re the first message "This explanation is really clever....but overwhelming when I try to comprehend it!"  Please let us know if this one is any better.

 

The message below illustrates how BO's Keynesian macroeconomic model "multiplier" theory is supposed to work out.  BO is counting on $1 of government spending resulting in economic output greater than $1 - his target is $1.50.  The message below shows the exact magic of such a theory, but then again maybe it is not magic but rather voodoo economics.

 

A slow day in Texas

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 rented when 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.