3 ms·

" the economic differences between regions in the US aren't nearly as large as in the eurozone" I think the origin of this and other problems is the lack of a

by niggler 14y ago

" the economic differences between regions in the US aren't nearly as large as in the eurozone" I think the origin of this and other problems is the lack of a significant EU-wide tax system. The US federal tax system serves as a wealth distribution mechanism (some states like NY and CA pay much more than they receive, and other states like OK receive much more than they pay). A similar system in europe would help the net import nations like Cyprus and greece.

InclinedPlane 14y ago
This works in the US because there isn't actually that great a disparity between the wealthiest and poorest states in the US, whereas the disparity is much, much greater in the eurozone. More so, the "poor" states in the US are still pretty wealthy even compared to some of the wealthiest European countries, whereas the poor countries in the eurozone are quite poor on an absolute scale (Estonia and Slovakia have a per capita GDP of around 15k USD, much less than half the poorest US states). Also, the poorest eurozone countries are quite populous, there are tens of millions of people who are living at less than 3/4 of the mean per capita GDP of the eurozone, whereas in the US the same figure is around 2 million. It's a much, much harder situation to deal with and the eurozone has fewer options and tools to do so.
- skinnynerd 14y ago
  Take a look at this table http://www.economist.com/blogs/dailychart/2011/08/americas-fiscal-union?fsrc=scn/fb/wl/mp/redandblack http://www.economist.com/blogs/dailychart/2011/08/americas-f... to see how income is distributed in the US between the states. New Mexico has received over two-and-a-half times its 2009 GDP more in federal spending than it has sent in taxes over a twenty year period. The equivalent for Europe would be akin to Greece getting over $760 billion. Yeah, Europe has to work on its "union" aspect a bit.
  - uvdiv 14y ago
    That's not comparable: one is subsidy, one is spending. US spends money in New Mexico by maintaining military bases and hiring New Mexico residents to work for them [1]. They serve the entire country, not just New Mexico. In contrast, the EU sending checks to Greece or forgiving its debt is pure subsidy. Only Greece directly benefits from it. It's one thing to spend money in exchange for goods and services, and another thing to give it away in exchange for nothing. [1] https://en.wikipedia.org/wiki/New_Mexico#Federal_government https://en.wikipedia.org/wiki/New_Mexico#Federal_government

by niggler 14y ago

InclinedPlane 14y ago

This works in the US because there isn't actually that great a disparity between the wealthiest and poorest states in the US, whereas the disparity is much, much greater in the eurozone. More so, the "poor" states in the US are still pretty wealthy even compared to some of the wealthiest European countries, whereas the poor countries in the eurozone are quite poor on an absolute scale (Estonia and Slovakia have a per capita GDP of around 15k USD, much less than half the poorest US states). Also, the poorest eurozone countries are quite populous, there are tens of millions of people who are living at less than 3/4 of the mean per capita GDP of the eurozone, whereas in the US the same figure is around 2 million. It's a much, much harder situation to deal with and the eurozone has fewer options and tools to do so.

skinnynerd 14y ago
Take a look at this table http://www.economist.com/blogs/dailychart/2011/08/americas-fiscal-union?fsrc=scn/fb/wl/mp/redandblack http://www.economist.com/blogs/dailychart/2011/08/americas-f... to see how income is distributed in the US between the states. New Mexico has received over two-and-a-half times its 2009 GDP more in federal spending than it has sent in taxes over a twenty year period. The equivalent for Europe would be akin to Greece getting over $760 billion. Yeah, Europe has to work on its "union" aspect a bit.
- uvdiv 14y ago
  That's not comparable: one is subsidy, one is spending. US spends money in New Mexico by maintaining military bases and hiring New Mexico residents to work for them [1]. They serve the entire country, not just New Mexico. In contrast, the EU sending checks to Greece or forgiving its debt is pure subsidy. Only Greece directly benefits from it. It's one thing to spend money in exchange for goods and services, and another thing to give it away in exchange for nothing. [1] https://en.wikipedia.org/wiki/New_Mexico#Federal_government https://en.wikipedia.org/wiki/New_Mexico#Federal_government