Gee, I wonder:
An interesting article in The Economist compares tax revenues raised versus spent in the states. I’m sure that many of you (by which I mean both of you) keep some kind of tabs on this issue, but with the gravy train having been driven off the rails, the issue of which states are most dependent on federal redistribution has taken on a new urgency.
As I and others have argued, here and elsewhere, for a couple of years, Obama’s massive “stimulus” aid to the states was largely expended in propping up for a couple of extra years the insupportable pension schemes for public workers. The net effect may have been the creation of a small number of administrative positions, and the explosion of administrative positions is one of the major contributors to the higher education bubble (and what self-respecting university doesn’t need a special Student Life Initiative Outreach Specialist for Tamils, after all?), but by and large it was a costly kicking of the can down the road.
Some states are better poised to weather the situation than others, but even those that sport a deep green in this map are going to experience dislocations. Take, for example, Illinois. The state as a whole has been getting the shaft, but you can bet your bottom dollar, assuming you still have one, that Chicagoland has been the recipient of major federal funding. The state’s decision to increase personal income taxes by a whopping 50% has had the effect of causing major employers to look elsewhere to headquarter, or to move plants. That translates into capital flight from Illinois to surrounding states.
While Scott Walker was being demonized for trying to get public expenditures under control, but preserving educators’ jobs, teachers unions barely emitted a squeak as payrolls were cut back in California and elsewhere. The gouging of the hostage union health care program was exposed for all to see.
Returning to Illinois, most political analysts would say that Obama can count on those electoral votes in 2012, and perhaps it will turn out that way. But Obama voters in that state believed that they would see benefits from having one of their own in the White House, and it hasn’t worked out that way. At the last minute, Obama extended himself to try to get the Olympics for Chicago, and bombed disastrously. It was a ramshackle attempt at a cheap payoff, and it didn’t work out. The same fate has been overtaking the high-speed railroad boondoggle, only more gradually.
The “reality-based” community is notably hacked off at this moment that the Obama Administration has “permitted” reality to obtrude so horribly into their pipe dreams, but you can expect the revision to begin very soon, because Obama’s increasingly all they’ve got, even if he’s an abject failure.
- Excited
- Angry
- Not as Angry
- Bored
- Indifferent
- Sad
I wish it had a third option to view, though it’d be complicated: Federal spending without federal parks, land purchases and interstate upkeep. I know those are tricks that the Washington version of that story used to show how the east side is a leach on the west.
(didn’t hurt that all the big businesses have their headquarters on the coast, even if that’s the only land they own on the wet side of the mountains, or that the Seattlites that get grants for their “organic orchards” on the west side pay taxes on the east side)
Well, one of the analyses we rarely see is the one that shows which states are able to cleverly get a lot of their state income from others, outside the states (e.g., New York via businesses, Nevada via tourists).
That’s one of the things CA has been unable to do, because we are so huge (in land to some degree, but especially, of course, in terms of population)–the state government hasn’t figured out how to extract money from those who live elsewhere.
Naturally, I’d prefer that we just stop overspending. Naturally, they don’t listen to me.