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5 years 22 weeks ago, 9:34 AM

samD

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Economics 101

Young Thomas, clever and bright, bought a donkey from a farmer for $100.

The farmer agreed to deliver the donkey the next day.

The next day the farmer drove up and said,
"Sorry Thomas, but I have some bad news, the donkey died."

Thomas replied, "Well, then just give me my money back."

The farmer said, "I can't do that. I went and spent the money already."

Thomas said, "OK, then, just bring me the dead donkey."

The farmer asked, "What are you going to do with a dead donkey?

Thomas said, "I'm going to raffle him off."

The farmer said "You can't raffle off a dead donkey!"

Thomas said, "Sure I can. Watch me. I just won't tell anybody he's dead."

A month later, the farmer met up with Thomas and asked,
"What happened with that dead donkey?"

Thomas boasted, "I raffled him off! -- I sold 500 tickets at
two dollars a piece and made a nice profit of $898.00."

The farmer said, "Didn't anyone complain?'

Thomas said, "Just the guy who won. So I gave him his two dollars back."

The farmer shook his head in amazement, and walked away.
A year later, Thomas comes running into the farmer's yard,
out of breath and looking frightened.
"You must help me hide!" cries Thomas.
The farmer asks, "Why? What's wrong?"
Thomas explained, "I went all over the village, hiring people
to sell raffle tickets for the same dead donkey, and then those
people hired other people to go to other villages and
sell raffle tickets for the same dead donkey, and now there are
thousands of raffles taking place all over the kingdom.
Millions of people and pension funds bought my raffle tickets,
but the donkey started to stink and everybody found out it
was dead, so now they want their raffle ticket money back!"
The farmer suggested, "Just pay back the money, Thomas."
"I can't!" Thomas moaned. "I spent it all on bonuses for
my raffle salespeople, and private jets, and huge mansions,
and an opulent lifestyle to which we, in the raffle ticket business,
have become accustomed. Not only that, I borrowed against my raffle ticket
earnings 35 fold, so now I OWE 35 TIMES the money I actually earned!"
We interrupt this parable to try to thwart copy/pasters who
re-post this parable without attribution to linkydinky.com
Written and copyrighted two thousand nine by linkydinky.com

The farmer thought a moment, then smiled.
"Don't worry, Thomas. I know what to do."
Thomas asked, "What can possibly be done?"
The farmer answered, "Your raffle operation is the
biggest business in all the land. It's too big to fail.
The King will bail you out,
for the good of all his loyal subjects.
And with that, Thomas beseeched the King
for billions of dollars to create the R.T.R.P.
(Raffle Ticket Relief Program) to buy back
all the worthless raffle tickets.
Everybody thought that would be the end of it,
but it turns out the King didn't have enough
money to bail out the Raffle ticket holders, so he
issued official "Raffle Bonds" to borrow money
from other lands.
Everybody thought THAT would be the end of it,
except when the rulers of other lands figured out
their lent money was being spent on dead donkey
raffle tickets, they stopped lending it. So the King
decided to just print the money to buy back the
dead donkey raffle tickets.
Everybody thought THAT would be the end of it,
until it turns out that printing money causes each
individual dollar to be worth much less, so prices
for goods and services rose enormously throughout
the kingdom. The King decided to issue a new
paper currency denominated at 1/10th the face value
of the old dollars, and forced everyone to exchange
their old money for new money so prices would
come down to normal again.
Everybody thought THAT would be the end of it,
until the same thing happened with the new currency,
so the people rose up and toppled the King with
torches and pitchforks, and installed a new ruling
government with a new currency backed by gold.
And THEN they all lived happily ever after.
The End.

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