The $100 bill

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Apr 13, 2015
This may have been posted before, but .......... here goes:

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

He stops at a motel and lays a $100 bill on the desk, saying he wants to inspect the rooms upstairs in order to pick one in which 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 a local traveling hardware salesman.

The salesman rushes to the motel and pays off his room bill with the motel owner.

The motel 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, several citizens of the town have less debt, and now look to the future with a lot more optimism.

Does this process seem familiar to anyone?


Jan 2, 2005
Northern Illinois
I'm not a trained economist but if you analyze this story, not everybody wins as it first appears. All of the participants merely trade an asset that they had (an account receivable) for a debt (an account payable to another merchant) but really are no better off than before the $100 was put on the counter at the motel. Had the tourist actually stayed the night, i.e., paid the $100 to the motel owner, then the actual wealth of the town would have been increased because now the motel owner would be able to pay off his debt but end up retaining the extra $100 cash when the salesman pays off his debt to the motel owner. The increase in wealth would be the difference between his cost of providing the room and services and the $100 paid for the room.

bogus bill

Dec 25, 2009
When I read that I was reminded of the Lords Prayer. The part that go`s, "Forgive our debt`s as we forgive our debtors". Work`s, didn't it?

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