Thursday, December 08, 2011

A lesson in Greek economics

I received this story by e-mail.

It is a slow day in a little Greek Village. 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 village, 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 and 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 supplier of feed and fuel. The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the taverna. 
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 traveller will not suspect anything. At that moment the traveller 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, the whole village is 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.


Chee Ming said...

I know of another story, which is less happy and a lot more dirty.

There are two economy PhD students walking down a road. As they walk down the road, they pass by a pile of dog poo.

A said to B, "If you eat that pile of dog shit, I'll give you 1 billion dollar." Although unwillingly, B ate that pile of dog shit eventually.

Aft a while, the pass by another pile of dog poo. This time round, B told A, "If you eat this pile of dog shit, I'll give you 1 billion dollar." A, after promising to give B the money, felt the pinch and ate that pile of shit.

After this encounter, the two students told their professor about it. After some tapping on a calculator, the professor said, "Your action had generated 2 billion for our economy and all that we lost are 2 pile of dog shit."

Unknown said...

That's not the problem in Greece. In your scenario, every actual has got zero net debt. In this situation, we do not need the German. The local village chief (Greek Government) would have organised a meeting and declared everyone out of debt but without anyone else owing them as well.

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