LOGICAL THINKING III

Gary Dalessandro 

May 20, 2021 

From: Ask Marilyn in Parade Magazine

A tourist stops at a small hotel, puts a $100 bill on the counter, and goes to inspect a room. The owner takes the bill and rushes off to pay the butcher, to whom he owes $100. The butcher races to his wholesaler to pay off his own $100 debt. The wholesaler hurries to the farmer and gives him $100 for the pigs he bought. The farmer hands over $100 to the party planner who set up his bachelor bash. The party planner heads to the hotel to pay the $100 she owes for the party room and lays the bill on the counter. At that point the tourist returns to the front desk, says that the room is unsatisfactory, picks up the $100, and departs. The tourist has his money back, and everybody else is $100 ahead by reducing his or her debt by that amount. Could this be the answer to the debt crisis?

Marilyn's Answer:

Actually, everyone stayed exactly the same. For example, the farmer was owed $100 by someone, but he also owed $100 to someone else. The payments canceled one another out.

Answer expanded by JA:

It's all a wash. Even though it's true that no one is now technically in debt, it's also true that no one has any more money than they did before the tourist came to town. Since everyone was in debt to everyone else for the same amount of money, why bother keeping track of the debts?

So, even though it's been said that this really is the way the government works, it's not the answer to the debt crisis.