4 ms·

"The EU was never meant to be a transfer union" And yet if nations are going to share a currency, they need to have a coordinated economic policy, and that end

"The EU was never meant to be a transfer union" And yet if nations are going to share a currency, they need to have a coordinated economic policy, and that ends up happening. Wealthy states in the US perpetually give money to the poorer states, but there isn't an uproar about it. Seems like the EU was doomed to fail if it didn't allow for this.

notahacker 11y ago
Which is what many relatively level-headed economic commentators were saying before the Euro even launched... Not to mention the fact that the EU was also never meant to be a debt collection agency, which means that since German and French banks insisted on buying up higher-yielding Greek debt, they richly deserve to share the consequences of it being unsustainable with the Greek taxpayer.
- tonfa 11y ago
  I thought the German/French banks stopped having exposure to Greece debts a while ago.
  - notahacker 11y ago
    That's what the IMF loan that Greece is about to default on covered...
yummyfajitas 11y ago
It's unclear how much wealthy US states actually do pay poorer states. Whenever I see statistics attempting to quantify this, they tend to include a lot of questionable things. For example, a military base in Kansas which defends the entire US is treated as a transfer to Kansas, and a person who worked in NJ but retires to Florida has SS/Medicare treated as a transfer to Florida. If you know of good stats I'd love to see.
- AnimalMuppet 11y ago
  And things like I-80 across Wyoming are treated like a transfer to Wyoming. But if you want to drive I-80 from New York to San Francisco, you need I-80 to exist across Wyoming. It's not needed for the locals; it's needed for the cross-country traffic.
- sologoub 11y ago
  This is an interesting post from WalletHub that was also quoted by the Atlantic: http://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/ http://wallethub.com/edu/states-most-least-dependent-on-the-... They took Federal contracts, grants, direct payments and insurance payments to a given state and weighed it against the IRS data for the residents of that state. Interestingly enough, of the 50 states received back less that $1 for every $1 they paid in, meaning they were net payers. The rest of the states were net receivers of federal money. A bit easier to see this conclusion here: http://cdn.theatlantic.com/assets/media/img/posts/2014/05/Slide3/966724856.jpg http://cdn.theatlantic.com/assets/media/img/posts/2014/05/Sl...
- Retric 11y ago
  Bases that are on the BRAC to be shutdown list really should be a viewed as a subsidy. So we could quibble about what counts as a subsidy aka Corn ethanol. But, in the end you can look at any state with more federal money in vs money out and see a transfer of wealth. http://www.theatlantic.com/business/archive/2014/05/which-states-are-givers-and-which-are-takers/361668/ http://www.theatlantic.com/business/archive/2014/05/which-st... IMO any state that's over 2:1 money in vs out is clearly being subsidized. Granted it's a rough estimate as VA probably receives more money than suggested as so many people commute into DC for federal jobs.
ctdonath 11y ago
Several US states are heading toward bankruptcy. NY is very generous with its social spending, while at the same time driving businesses and individuals out via oppressive policies. PR, as noted, just declared its $72B debt is unpayable. Other states are approaching similar conditions.
- mikeash 11y ago
  Puerto Rico's debt is 70% of GDP. The worst debt-to-GDP ratio among the states is New York, at about 25%. The states have a long way to go before they look like PR.
  - ctdonath 11y ago
    The USA federal government (not states, just umbrella) has a 100% debt-to-GDP ratio.
- dragonwriter 11y ago
  > Several US states are heading toward bankruptcy. The only thing you've pointed to that looks anything remotely like heading toward bankruptcy is Puerto Rico, which is not a state.

notahacker 11y ago

Which is what many relatively level-headed economic commentators were saying before the Euro even launched... Not to mention the fact that the EU was also never meant to be a debt collection agency, which means that since German and French banks insisted on buying up higher-yielding Greek debt, they richly deserve to share the consequences of it being unsustainable with the Greek taxpayer.

tonfa 11y ago
I thought the German/French banks stopped having exposure to Greece debts a while ago.
- notahacker 11y ago
  That's what the IMF loan that Greece is about to default on covered...

yummyfajitas 11y ago

It's unclear how much wealthy US states actually do pay poorer states. Whenever I see statistics attempting to quantify this, they tend to include a lot of questionable things. For example, a military base in Kansas which defends the entire US is treated as a transfer to Kansas, and a person who worked in NJ but retires to Florida has SS/Medicare treated as a transfer to Florida. If you know of good stats I'd love to see.

AnimalMuppet 11y ago
And things like I-80 across Wyoming are treated like a transfer to Wyoming. But if you want to drive I-80 from New York to San Francisco, you need I-80 to exist across Wyoming. It's not needed for the locals; it's needed for the cross-country traffic.
sologoub 11y ago
This is an interesting post from WalletHub that was also quoted by the Atlantic: http://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/ http://wallethub.com/edu/states-most-least-dependent-on-the-... They took Federal contracts, grants, direct payments and insurance payments to a given state and weighed it against the IRS data for the residents of that state. Interestingly enough, of the 50 states received back less that $1 for every $1 they paid in, meaning they were net payers. The rest of the states were net receivers of federal money. A bit easier to see this conclusion here: http://cdn.theatlantic.com/assets/media/img/posts/2014/05/Slide3/966724856.jpg http://cdn.theatlantic.com/assets/media/img/posts/2014/05/Sl...
Retric 11y ago
Bases that are on the BRAC to be shutdown list really should be a viewed as a subsidy. So we could quibble about what counts as a subsidy aka Corn ethanol. But, in the end you can look at any state with more federal money in vs money out and see a transfer of wealth. http://www.theatlantic.com/business/archive/2014/05/which-states-are-givers-and-which-are-takers/361668/ http://www.theatlantic.com/business/archive/2014/05/which-st... IMO any state that's over 2:1 money in vs out is clearly being subsidized. Granted it's a rough estimate as VA probably receives more money than suggested as so many people commute into DC for federal jobs.

ctdonath 11y ago

Several US states are heading toward bankruptcy. NY is very generous with its social spending, while at the same time driving businesses and individuals out via oppressive policies. PR, as noted, just declared its $72B debt is unpayable. Other states are approaching similar conditions.

mikeash 11y ago
Puerto Rico's debt is 70% of GDP. The worst debt-to-GDP ratio among the states is New York, at about 25%. The states have a long way to go before they look like PR.
- ctdonath 11y ago
  The USA federal government (not states, just umbrella) has a 100% debt-to-GDP ratio.
dragonwriter 11y ago
> Several US states are heading toward bankruptcy. The only thing you've pointed to that looks anything remotely like heading toward bankruptcy is Puerto Rico, which is not a state.