Stop Welfare

There's a new website devoted to tracking inter-state transfers, which primarily run from the Blue States to the Red. For example, this map shows the ten biggest net recipients of the federal dole. DC makes this list, but that's a special case; HI is also on the list because of the large military presence there. All of the remaining eight went for Bush, and all but NM and WV heavily so.

On the flip side, there are only two Red states (CO and NV) among the ten states that get the least back from the federal government. Notable among the suckers are

• California, the world's fifth largest economy, which gets only $.78 back on every $1.00 it pays to the Treasury.
• Illinois, which forks over 23% of its federal taxes to the other states. Minnesota kindly donates the same amount, too.
  
• New Jersey, which gets back a measly $.66 of every dollar it pays. Connecticut does slightly worse, getting $.65 per dollar back.
  
• And last but not least, Taxachussets, which donates 25% of its federal taxes to its fellow states.
  

I'm beginning to see why the Blue states are often associated with socialism, and why MA is sometimes derisively called "The People's Republic of Massachusetts": this looks a lot like the modern embodiment of Marx and Engel's famous dictum: From each [Blue state] according to their ability, to each [Red state] according to their needs. I wonder how many Red state residents realize how much they rely upon this?

In any case, the new web site that looks like it will have a lot more on this and related subjects is stopwelfare.com (I can't believe Grover Norquist or one of his fellow-travelers hadn't grabbed that domain name.) Take a look.

Finally, on a substantive note, I am in favor of progressive taxes, which necessarily means that I actually do support rich states subsidizing poor states. But we can all be sure that no progress is likely to be made on the progressivity front over the next four years. Instead, the following will almost surely be true:

1. Any new spending program enacted by the current administration and upcoming Congress is likely to be a fairly large disaster. Witness the bizarre structure of the Medicare drug benefit.
   
2. The Democrats are not going to be able to repeal past tax cuts, nor block any new ones.
   

Given these two conditions, the best Democrats can likely do is try to keep spending growth as low as possible, which conveniently happens to be the responsible course of action given Bush's deficits. Since rapid spending growth probably helps Red states the most, success here would probably be good for the Blue states, but that's just a side benefit and not a justification. Democrats may actually have some leverage on this dimension because there are some Republicans who want the same thing, particularly in the Senate.

At the same time, Democrats can quietly go along with any new tax cuts because to do otherwise would be not only unpopular, but futile. Of course, they can grin slyly as, overall, their constituents benefit at the expense of Bush's.

That the plan of action dictated by these principled and pragmatic considerations is basically identical to that laid out in my angry post-election post (which could have been titled "Smite the Red States") is purely coincidental.

AB