What is Happy Hotel?
1.
A euphemism for a mental institution, which is a place for people who have gone completely
Joe: Hey Nick, have you heard? George Bush is the smartest guy in the world.
Nick: ... O... kay... So when are those nice people in white coats going to take you to the happy hotel?
Joe: I dunno... I heard that they wanted me over at three.
Nick: .... *Quietly backs away*
See
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