What a shamefully wrong statement from a whole wazua veteran.

Masterpiece on economics.

One day a tourist comes to the only hotel in a debt ridden town in Kenya. He lays a 100 dollar note on the table & goes to inspect the rooms. Hotel owner takes the note & rushes to pay his debt to the butcher. Butcher runs to pay the pig farmer. Pig farmer runs to pay the feed supplier. Supplier runs to pay the prostitute, who in these hard times gave her services on credit. Prostitute then runs to pay off her debt to the hotel owner for the rooms she rented for her clients. Hotel owner then lays the 100 dollar note back on the counter. The tourist comes down, takes his money & leaves as he did not like the rooms.
No one earned anything. But that group of people is now without debt & looks to the future with a lot of optimism.

How much was it

@Mkeiyd, newfarer is right and you are wrong, as no value was created, no one really earned anything.

And assuming the chain of debtors and creditors represent the whole economy, then no one is better off as their situation has not changed.

But it does feel good to starve debt free

@PeterReborn, value is created when goods and services are exchanged not when they are paid for. Payment is just for facilitation.

In this scenario, value will most likely be created if everyone is now happy with the credit rating of their customers and offer further goods on credit. Which doesn't make sense because they could have gone on giving credit anyway.

By the way this simple transaction is what sets the american commercial system ahead of the rest in the world, bad debt is normally written-off very fast to allow for more trading. This is done through filing chapter 11, writing down inventory and quick disposal through sales etc.

They borrow from the rest of the world, trade and return the money with 1% interest through more borrowing.