This feels very adjacent to the story about the whole town in debt, and the rich guy leaves a $100 bill on the table, [and so on], in a way that I can't quite put my finger on.

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joenot443 3 hours ago | parent | next [-]

It's a cool little analogy, one I'd never heard of before

https://www.econlib.org/archives/2012/01/an_answer_to_a.html

> True, at the beginning each resident has a $100 liability. But each also has an offsetting financial asset of $100. At the end, they all have neither. So the $100 bill acts as a clearing mechanism

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throwaway667555 4 hours ago | parent | prev | next [-]

You can't put your finger on it because money is merely an accumulator and medium of exchange of economic performance. The performance of services in exchange for other services without money is a perfectly valid economic exchange that can and should be booked to revenue of each of the parties, if actually performed.

Loans without any economic performance of services generate circular meaningless cash flows yeah, but that's not the case when services are actually performed.

Loans are promises to pay. Business deals are promises to perform services or deliver goods. The difference is easily lost in the details even for accountants and economists.

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copperx 4 hours ago | parent [-]

That's a bit jumbled. You can gain clarity one level up the abstraction layer. Money is a note that means a debt is owed.

	▲	throwaway667555 an hour ago \| parent [-]
		When comparing promises between businesses to pay versus promises between businesses to perform services, it is irrelevant that fiat currency is a federal reserve note rather than, say, bottle caps. Irrelevant.

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adharmad 4 hours ago | parent | prev [-]

The man who saved Pumplesdrop By W. J. Turner

	▲	hirsin 3 hours ago \| parent [-]
		Not quite. At least the one I found is some trickle down economics myth. The one op is referencing is more like the dollar is used to pay off the waitstaff, who pay their rent to the landlord, who pay their over due taxes, so that the government can issue a refund to the cafe owner. The dollar ends up back in the hands of the cafe owner, who puts it back down on the table with all the debts paid off.