Debt settled

Interesting illustration on debt settlement in an economy system:

A merchant happened to come across a village on one of his travels. This village was not doing well economically. Business was slow, jobs were hard to come by and many people were in debt. He stopped by an inn to see if he likes it enough to stay for the night. He put a $100 bill on the counter as deposit to the innkeeper to allow him to inspect the available rooms.

While the merchant was busy checking out the rooms, the innkeeper went out, taking the $100 with him, to see his supplier. He gave the money to his supplier to pay his outstanding bills for supply of goods to the inn. After receiving the $100, the supplier then gave it to his employee as wages which he had owed for a long time. The employee then went home and on his way met his neighbour who had lent him money several months ago. He repaid the loan from his neighbour with the $100. The neighbour who took the money then went to the inn where a hooker had been providing her “services” to him on credit. He paid the $100 to the hooker to settle the amount owed to her. When the innkeeper returns to the inn, the hooker gave the $100 to him as payment for the room which she had been staying for the past week.

Just then the merchant completed his inspection and said he will not be staying at the inn after all. He asked for refund of his deposit and the innkepper promptly handed the $100 bill back to him. The merchant then left the inn for another trip elsewhere.

The merchant did not lose anything, nobody became richer but all debts of the innkeeper, his supplier, the employee, the neighbour and the hooker have been settled.

Now, back to reality. If that sounds easy, then there will be no debt in the countries, which is not the case.