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                Windsurfing at Palo Alto in SF Bay in May 2009
How A Stimulus Package Works
or at least how it is supposed to work
                Windsurfing at Coyote Point November 2009

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An explanation of how printing money by the Federal Reserve to lend to the US government to give to tax payers in the form of lower payroll tax collections is supposed to stimulate the economy.
This was sent to my by my retired VC mentor who now lives on an island in British Columbia. 

It's a cold day in the small Saskatchewan town of Pumphandle and streets are deserted.  Times are tough, everybody is in debt, and everybody is living on credit.
A Traveler comes to town and lays a $100 bill on the hotel desk saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the hotel 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 to his supplier, the Co-op. The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit. The hooker rushes to the hotel and pays off her room bill with the hotel owner. The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.
At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves.

No one produced anything.  No one earned anything... However, the whole town is now out of debt and looks to the future with a lot more optimism.

And that, ladies and gentlemen, is how a "stimulus package" works.
Of course, if you buy an HDTV from Samsung, the money goes to Korea.  If you buy a new BMW built in Germany, then the money goes to Germany.

Butterfly Tattoo DesignYou can keep the money in America by spending it at yard sales, going to a baseball or football game, or spend it on prostitutes, beer and wine (domestic ONLY), or tattoos, medical marijuana (grown in the US) since those are the only businesses still in the US. Golf is an option; however, all the equipment is made in China.

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