The Stimulus Explained

An economist friend forwards this piece of Internet flotsam:

It is August. In a small town on the south coast of France, holiday season is in full swing. But it is raining, so there is not much business happening. Everyone is heavily in debt.

Luckily, a rich Russian tourist arrives in the foyer of the small local hotel. He asks for a room and puts a Euro 100 note on the reception counter, takes a key and goes to inspect the room located up the stairs on the third floor. The hotel owner takes the banknote in a hurry and rushes to his meat supplier to whom he owes E100. The butcher takes the money and races to his wholesaler to pay his debt. The wholesaler rushes to the farmer to pay E100 for pigs he purchased some time ago. The farmer triumphantly gives the E100 note to a local prostitute who gave him her services on credit.

The prostitute goes quickly to the hotel, as she owed the hotel for the hourly room she used to entertain clients. At that moment, the rich Russian returns to reception and informs the hotel owner that the proposed room is unsatisfactory, takes back his E100, and departs.

There was no profit or income, but everyone has been freed from debt, and the townspeople look optimistically toward their future.