Just in case you don't think the federal tax data was impressive enough, I prepared a map comparing the Gross State Product per capita across the states. These are the 15 states that have the lowest GSP. Not surprisingly, all but one are red. 15 of the 19 blue states are in the top 25, and if you look at the average GSPs, you see where the money is coming from.
Data were obtained from the Bureau of Economic Analysis www.bea.gov,
GSP data for 2004 and from the U.S. Census bureau, www.census.gov,
population statistics from 2004.
It is unfair to say that Red states are "building bridges to nowhere." While it may be initially illogical and sometimes unwise to run up spending in times of recession, it does make a certain economic sense.
1) Governments natural spend more in times of hardship because more social programs (ie. state healthcare, unemployment, rent assistance, homeless shelters, free lunches in schools, police) are required to pick up the slack created by a failing economy.
2) By creating state sponsored spending you can introduce more money into the money supply which will, theoretically, boost the local economy. Say for example that the government buys 2000 sandwiches from Joe (which it can throw away for all we care). Joe is then able to go across the street to Karen from whom he will buy candle sticks and down the road where he will buy tomatoes from Hakim and pears from Consuela. Karen, Hakim and Consuela will in turn go buy products from other people and pay their workers more and so on and so forth. However there are two key problems with this theory:
a) In the age of multinational corporations the profit doesn't flow freely throughout the entire population -- it gets sucked into the abyss of ‘corporation’ which fails to reinvest in the community and
b) this theory is often implemented with the "trickle down effect" in mind which is a stupid idea (rich people take currency out of the money supply by depositing it in banks at much higher rates).
2:20 AM, June 22, 2006
Governments natural spend more in times of hardship because more social programs (ie. state healthcare, unemployment, rent assistance, homeless shelters, free lunches in schools, police) are required to pick up the slack created by a failing economy.
Too bad Republicans want to eliminate the social spending that Anonymous #1 identifies, above. All of this stuff isn't the Government's domain, it should be handled by the private sector (or charity), right?
By creating state sponsored spending you can introduce more money into the money supply which will, theoretically, boost the local economy.
Isn't this what drives the Grover Norquist camp bananas? I think a major wing of the Republican Party insists that Government shouldn't be spending so much, period.
2:04 PM, June 22, 2006
If I remember correctly Grover Norquist says he wants to drown our government in the bathtub. What a creep. I'm glad to see McCain brought him down in connection with Abramoff.
12:01 AM, July 12, 2006
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