Thread by @sway_hi

Have been meaning to write on Money Flow, since it is difficult to comprehend. So, using hotel as an example, here goes:
A 300 room hotel on an average employes around 1000 people.

When one books a hotel room. A small %age of it immediately heads to govt as taxes. 1/n

The balance is used by hotel to pay salaries, pay it's bills to reservation companies, to travel agencies, to electricity companies, to water supplier, to sellers of food and sellers of amenities.
In turn the suppliers, employees use the money to pay their own bills.2/n

The suppliers receiving money from the hotel use the money to pay their transport partners, the farmers producing the items and their own employees.
The employees of the hotel/the supplier pays his/her own bills. With that money they buy food and other goods. 3/n

Each time there is a buy/sell transaction happening, the govt gets to collect a small %age as taxes.
The employees of hotels/suppliers/ software company providing reservation also give taxes to the govt.
The govt uses these taxes to build roads, schools, hospitals etc. 4/n

So, when a 300 room hotel is shut, around 1000 people lose direct employment.
Then some of those employed by software company, suppliers etc also stand to lose their employment.
This trickles down to the farmers, the families of all employers losing jobs. 5/n

The govt loses the tax that it could have collected from all these people directly and indirectly everytime they bought/sold something.
The industries that they would have perhaps bought a house or a car.
Most cos r cannot pay salaries without revenue beyond a month. 6/n

Now multiply the 300 hotel room scenario with hundreds of big, small hotels. That is the extent of damage that is being faced by just the hotel industry currently. Add Airline industry, Automobile Industry and other discretionary spending based industry. The numbers r huge! 7/n

I have just through the above tweets tried to explain an economic system and money flow as it happens.
Currently this system has been put under a house arrest. Even after being restored, the system takes sometime even months/years to kickstart. 8/n

Now this article s plugging in the loss figures. Airline industry in India is losing 75 crore to 90 crore per day with 29 million people (2.9 crore) likely to be unemployed! (9/n)
livemint.com/news/india/cov…

And another bit of news to drive the point home!
marketwatch.com/discover?url=h…