[dasht]

This quote is one of those intuitively plausible things that turns out not to be true: "the more important point to analyze is: when you add it all up and average over all businesses, is it a wash? After all, those dollars must be going somewhere, and I would think that they're making some communities somewhere pretty happy."

It doesn't work that way. Think of the "lifespan" of a typical book-buying dollar:

(a) A dollar in circulation is created along side a corresponding dollar of debt. Banks are not getting dollars out of their vaults when they make loans. They are typing some numbers into a computer and creating entirely new dollars.

(b) The dollar passes from hand to hand in various transactions, eventually reaching our book-buying consumer.

(c) Someday, the dollar will likely cease to exist when it is used to retire debt. Even before then, the dollar can wind up "parked" (noncirculating) in large accounts that are held in reserve (e.g., in cash or in constantly rolled over treasuries).

A dollar spent at a big corporation like Borders is much more likely to reach state (c) sooner. This missing spending doesn't move to some other community, it just never takes place.