"The money that gets spent in Sidmouth is not just a one-off,and goes around and around. If the landlord of the Anchor has a particularly good year thanks in part to the festival goers then he might spend some money on e.g. redecoration or alterations. He may use a local builder, who might then use the Radway for a pint after work"

Quite a good example except that most of the money spent at the Anchor goes straight out of the town to brewers, food supploers, etc. I'm sure I saw a claim that every pound you spent magically multplied to become £39! My guess is that less than 39p stays in the town.

Another good thing about the Anchor example though is that it's one of the few businesses that does make a lot of money at festival time. Or maybe their membership of the patrons scheme and giving the venue is just stupidity of another sort :-)