Wednesday, January 19, 2005

Red State Economic Irony

According to a recent report by the Tax Foundation, which was featured prominently in today’s Washington Post Business section, the biggest winners in the federal money spent per tax dollar collected race was New Mexico at $1.99 in federal dollars spent for every dollar of taxes collected. Now, New Mexico is a "swing state" politically, with a popular Democratic governor and two Republican Senators. In 2000, it voted for then VP-Al Gore, while in 2004 it shifted its allegiance and awarded its 5 electoral votes to President Bush. Thus, it is fair, to a point, to say that the largest beneficiary of government largess, was a "red state." Well, admittedly its not fair to only pick on the winner, so lets look at the next 6 on the list: Alaska, Mississippi, North Dakota, South Dakota, Alabama, and Montana, "red states" all. Now, I think, its fair to make an observation, to quote and paraphrase a famous author, "something is rotten in the state of ..." America. Is it just me or are we not to take something from this recent turn of events. Is there not a blatant irony that the professed red-state economic policies: reducing the size of the federal government; encouraging an "ownership society" free from the shackles of government dependence (a point and phrase I think we will hear a lot from the President in both his upcoming inaugural address and the State of the Union); minimizing the burdens of income and corporate taxes; is actually the direct opposite of what is happening within the heart of the red-state populations.

If you’re still not convinced then take a look at the bottom of the list, i.e., those states that received the least amount of return on their taxes. The results include a plethora of the "bluest" states in the Union, New Jersey $0.57 back per $1.00 in taxes, Connecticut $0.65, Illinois $0.73, California $0.78, Massachusetts $0.78, and New York $0.80. These states aren’t even breaking even, in fact, they are subsidizing the remainder of the population. In reality what the GOP has created is an economic universe where the populated states help fund the unpopulated states, and in return the unpopulated states ban together to elect Presidents and win elections. Now I suppose that there is some perverse genius to this plan, but I prefer to see it more as the do as we say not as we do variety. In other words, while the GOP parades around professing to be the party of less government and more markets, they are really the party of less government where were not popular, and more government where we are. So am I to read this report and think that government programs are somehow less valuable in California, the most populous state, than they are in Alaska, the least populous. Is the government’s money less useful in New York City, than it is in Birmingham, Alabama. Or am I to assume that government programs really do work, which is why there are so many in GOP districts and states. (Shhhh don’t tell anyone that, because the GOP is trying to horde all the government programs for themselves and their constituents while continuing to tell the rest of us that they are evil and don’t work) There has to be a breaking point here somewhere, because I don’t think that blue state populations are going to continue to see their tax dollars subsiding other states, while at the same time watching their health care costs rise, education systems suffer, job markets stagnate, and cost of living continue to increase.

The Post column points to the farm subsides program as the largest culprit in this equation, but that’s a fact that I do not agree with. Florida and California, for example, are both huge agriculture states as well, thus, their residents benefit from the farm programs as much if not more than those in the mid-west and south do. That being said, the fact remains that farming is a weather dependent, cyclical business that has very profitable years (as they are currently experiencing) and very, very lean years (which is what happened a few years ago). The fact remains that the good years are still not good enough to cover the inevitable bad years. In other words, when any one of the following occur i.e.,the weather goes south; the world demand shrinks; or supply increases from other parts of the world driving down prices, farmers are going to get killed, and then the subsidy programs will be what they depend on to make ends meet until their fortunes, such as they are, return. I don’t doubt that the program is part of the problem, I just don’t think that scrapping it is the solution.

Note the states high on the list, Alaska (Senior Senator who was recent chairmen of the Senate Appropriations Committee), Mississippi (Senior Senator who was formerly Senate Majority Leader and now is the Rules Committee Chairmen), North Dakota, Alabama, Montana (heavily, if not 100%, GOP delegations with members on a lot of various committees with authority over federal spending). South Dakota is the outlier with it being the former home of the Senate Minority leader, so look for its stock to fall considerably as its new junior Senator works his way up the GOP ranks. I think the culprit is clear, its not the farm subsidy, but politics as ususal. It is the protect yourself and your colleagues, strengthen your majority at all costs, punish your enemies, and betray your principles mentality of the GOP political strategy that have created this mess. I only hope that the Congressional Democrats and the American people figure it out soon, or its going to get worse, much worse, before it gets any better.


<< Home

This page is powered by Blogger. Isn't yours?