Where does the money go?

Today I was walking to work and as I passed a hotel, I saw a guest hand a bellman a few bucks for getting him a cab. I started to wonder, where will that money go next? I was pretty sure he would not be reporting it on his W-2. This made me wonder, how far could those few dollars go in the unreported economy?

Let's say the bell man walks over to the strip club down the street after his shift. He stuffs a few bills in the strippers g-string and heads out. She heads back stage to meet her pimp who she owes money from the night before. He takes the money to his drug dealer and scores an eight ball. The drug dealer takes that money and hands it over to his bookie to place a bet. The bookie pays the money out to his strong man for collecting on a deadbeat. The strong man goes to get a haircut, where he passes the money over as a tip. The barber uses the money to tip his waitress at lunch.

So far this money has changed hands almost ten times and no one is going to pay any taxes on it. I am sure this could keep going, but I think you get the point.