most recent available statistics (for 2005)<\/a>, Kansas was receiving $1.50 in Federal spending for every $1 that Kansas taxpayers paid in Federal income taxes.<\/p>\nAlaska receives more than $1.80 back for every $1 paid to the IRS.<\/p>\n
These massive subsidies aren’t viewed as a “bailout” or a “loan” or a “subsidy.”\u00a0 This didn’t just happen once, as a “stimulus.”\u00a0 It happens every year, year after year.<\/p>\n
And small, less prosperous American states aren’t expected to pay that money back, as poorer states in Europe are required to do.<\/p>\n
Indeed, if forced to “borrow” that money, states like Mississippi (which in some years receives back twice as much money from the treasury as its citizens pay in Federal income taxes) would have collapsed long ago.<\/p>\n
Just as Greece is on the verge of collapse now.<\/p>\n
Here in the US, this steady transfer of wealth between members states has been internalized as a standard part of American political life.<\/p>\n
Indeed, much of the American West and South \u2014 interstate highways, hydro dams, vast military bases, the education infrastructure around Silicon Valley, and on and on \u2014 was built with wealth generated in the Northeast and the Upper Midwest.<\/p>\n
Taken in sum, I think it’s arguable that this “liberal” American approach \u2014 wealthy states helping poorer states \u2014 has proven itself to be the wiser and more sustainable than the one being pursued in Europe.<\/p>\n
While France and Germany demand that their less productive member-states shoulder massive loans, relegating them permanently to the status of debtor-partners, the United States has pursued a policy of building up all fifty states.<\/p>\n
Imagine if we had pursued a European model.<\/p>\n
If forced to go it alone, in fiscal terms, Alaska and Kansas would be far less stable.\u00a0 During the recent Great Recession, any number of American states would have toppled into insolvency without huge amounts if aid from Washington.<\/p>\n
They would likely have been forced to withdraw from the “dollar union.”<\/p>\n
And economic downturns aren’t the only threat.\u00a0 Imagine if Louisiana had been forced to recover from Hurricane Katrina solo.<\/p>\n
Or if the drought-stricken states of the Southwest lacked a massive Federal reservoir system, built to sustain their cities and their farms.<\/p>\n
Obviously, there are weaknesses to the American system. Big urban states grumble mightily as dollars flow away year-after-year, decade after decade. But in the long run, it has proved to be a great investment.<\/p>\n
Following this model, America emerged in a single century as the biggest, most productive, and most stable economy on earth.<\/p>\n
In Europe, by contrast, fiscal conservatives who feel that they’re being hoodwinked by their lazy, bumbling neighbors insist that member states must sink or swim separately — while also trying to use the same currency.<\/p>\n
As a result, the whole experiment of a European Union is imperiled.<\/p>\n
As the technocrats in Bonn and Paris squeeze Greece and pummel Portugal and Spain, they would be wise to look at the relative success, prosperity, and stability of America’s member states, places like Alabama and and Arizona and Louisiana.<\/p>\n
(NOTE:\u00a0 This essay was first published in February 2012)<\/p>\n","protected":false},"excerpt":{"rendered":"
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