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In reality the states that are most outwardly in favor of small/no federal government and "states' rights" are also the ones that benefit most from federal spending. Don't buy into the campaign speeches too much. The federal government is only going to keep getting stronger. There's too much money in it for everyone involved.

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Unfortunately the public within the states that benefit most from federal spending are constantly told the opposite by their leaders. Similar situation with water rights, and several other tragedies of the commons.

Maybe consider that the desire of groups of people to be in charge of decisions that affect them, instead of submitting to the decisions of far away rulers, overrides for many people the desire for free money. Many people, for example, want Puerto Rico to be independent, even though they undoubtedly would get more free money if they became a state.

Or consider most people are being tricked as the other person was saying.

Yeah most of the states opposed to the federal government would never lead because they get a large amount of equalization type payments due to various measures on which they perform worse than successful states.

It's nearly impossible to leave a government you don't really approve of if they are transferring a large amount of money into your local economy.

I wouldn't bet against dumb in the short run: see brexit.

It's a different sort of dumb. Britain didn't get more from the EU than it paid in, it was one of the wealthier countries in the EU.

Britain was wealthy when it left. When it joined the EU it was the poorest member joining.

Are you sure of that characterization that the UK was the poorest member when it joined? That seems incorrect. The UK has always been one of the stronger economies in the European zone.

In 1972 the UK still hadn't recovered economically from WWII, and the other members of the EU at the time were France, West Germany, Luxembourg, the Netherlands, Belgium and Italy. With the possible exception of Italy, all those are (per capita) economic powerhouses.

At the point of the UK joining Italy had a higher GDP per capita than the UK.

Thanks, I'm never sure about when Italy seemed to have declined (relative to some of the more wealthy neighbors). Or maybe tourism and partially remembered facts aren't a reliable source and their economy is still doing well.

Italy's GDP stopped growing when they joined the Euro.

That makes sense. The Euro was kind of a disaster for all the southern European countries, as far as I can tell.

There's no contradiction in wanting both (a) other people's money, but not (b) other people's rules. This is a natural mentality.

And also (c) paying other people's taxes.

Reduction of the fed may be the only way to ever meaningfully address national debt.

That's rational. What's irrational is w hen blue states get mad at red states for not taking their money.

Not if it ends up costing more in the long run, like when instead of spending money on prevention it must be spent on disaster recovery. If the agreement was "We won't give you this money now, and we won't rescue you later when it turns out you would have needed it" the attitude might be different.

If any state is going to be demanding a federal bail out anytime soon it’s going to be blue states like Illinois and New York facing catastrophic pension burdens coming due.

The federal government probably should not bail out IL and NY's pension systems, which are mismanaged. But have you done the math on this red/blue net dependency thing? I pulled up the numbers on proposed and theoretical pension bailouts, and then the net federal dependency numbers for red states, and it does not appear to be a close call. But I didn't look very carefully. Did you?

Illinois has the highest tax burden in the country. We're not Greece. We are paying through the nose for, well, everything. We get 95 cents on the dollar for our federal taxes, and we pay a lot of those.

Texas is a lower-tax state. It is, in some ways, better managed than Illinois. But it gets 20 cents back on every dollar it pays in federal taxes.

It seems to me that the reason not to bail out pension systems is that they're long-term unsustainable, and that they're mismanaged, and something has to be done to stop the bleeding. But it's hard to argue that bailing them out would be a redistributive injustice. We subsidize the low-tax red states.

(A comically similar microcosm of this debate occurs within Illinois, with rural Illinoisans regularly making noise about wanting to divest itself of Chicagoland. Go right ahead, Peoria!)

Instincts and "natural mentality" can be contradictory.

It's a hell of a bargain, though -- we'll destroy your economy, attack you population, but give you money so you're not as dirt poor as we would have otherwise made you.

That federal spending is done perpetually at a budget deficit though. Is it so difficult to believe that a state couldn't also figure out how to build a money printer?

The federal money printer is backed by the strength of the national economy. How would the money printer backed by the states ranked at the bottom in GDP per capita, lifespan, education etc. fare? I can't imagine that going well.

Given that the poorest US states are similarly wealthy to rich European states, it would go fine: https://mises.org/wire/if-sweden-and-germany-became-us-state...

I think that article is just number massaging. I have been to both Sweden and several US states (some of them quite wealthy) and there's no color. As in: a diabetic school teacher can afford insulin. On the explanation section of that article it says:

> The Census numbers are much higher than the OECD numbers for a variety of reasons. In fact, the OECD income number of the US is only 59 percent of the Census number.

The adjustment they did was "moving all the medians of all the states down by 59%" but I don't think that is enough. A more appropriate way to compare things would have been figuring how what those "differentiating reasons" and deducing amounts for each of the states, or incrementing the other countries' median in the same way. The American Census could (for example) be counting every state's natural resources as part of each household's income. In that case, they should include Sweden's petrol reserves in that computation. With the disparate measurement methods and the simplistic adjustment, they are comparing apples to oranges.

In the US, most school teachers can also afford insulin, because they have generous healthcare plans. Remember, over 80% of Americans are happy with their own healthcare quality. The difference between the US and Sweden is that Americans would rather have bigger houses and more cars than ensure that the small fraction of teachers who can’t get insulin now can do so.

To be clear, that adjustment can only affect the relative numbers across US states, not the overall average for US states. That is because all states are adjusted by the OECD number for the US. Presumably the OECD methodology is consistent within itself.

So maybe the Census includes oil resources and OECD doesn’t. Discounting the US numbers across the board to 59% may make Texas and California artificially look better than Mississippi. But the overall average of the US states would still correspond to the OECD number for the US, which presumably is computed the same way as for Sweden.

I assume it would be fine. Iowa’s GDP is bigger than Greece and it’s GDP per capita is comparable to Norway’s. Mississippi’s GDP per capita is higher than France’s.

Yet France provides far more social services to its citizens with less money per capita than Mississippi. I guess the difference is mainly due to immense spending on defense and medical care.

Defense is a drop in the bucket, 3.5% of GDP in the US versus 2% in France. The difference is taxes and what people have let after taxes. France’s taxes are 45% of GDP, versus 25% in the US. The French have universal healthcare, but Americans have bigger trucks and more TVs. And based on their voting patterns, they prefer it this way, whatever you think about their priorities.

Having been to a French hospital and having been shocked by what I saw there, I wouldn't assume that more spending automatically equals more services.

Imagine if the poor but anti-democratic states that choose policies that hurt their citizens and vastly benefit form being subsidized by rich liberal states like NY and California, say Kentucky and Mississippi leave the US.

More on topic, those poor states that benefit from federal money would not have a very strong economy and they would not be able to do deficit spending on their own currency or pay for things through deficit spending. If Oregon, Washington and California formed a new country or joined Canada they'd be better off financially, because their tax drain to poor state america would end. I don't want a split but I'm starting to feel it will happen in my lifetime. I'm more than ok with helping the poorer states with their infrastructure needs, we are all in this together. But I'm tired of 15% of the population having control over the federal agenda through the senate.

This is a good example of why the federal government has lost trust. Perpetual money printing and MMT is not a big trust-builder.

Japan has deficit-spent more than the United States as of late. Japan has problems, but an existential loss of trust in the central government and failure of state capacity are not among them. They have bullet trains.

Japans Nominal GDP also peaked in the 90s, and their Debt/GDP has continually increased since.

Japan's GDP-per-capita has been roughly stable since the 90's:

https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...

Yeah, no growth and increasing debt is not a sustainable situation

> Is it so difficult to believe that a state couldn't also figure out how to build a money printer?

Yes. There's a reason US dollars are accepted worldwide Zimbabwean dollars aren't.

US Dollars. Not "Republic of Texas" Dollars.

Once states secede, they lose all the clout that comes from being part of the world's only superpower controlling the world's reserve currency. Southern states would be better off switching to Pesos than printing their own.

You're agreeing with me. I'm saying that it is in fact hard to just run a printing press, which is why US dollars are worth something and Zimbabwe dollars are not.

Texas is enormous. If they switched to their own currency it'd be doing fine. This "clout" and "superpower" nonsense was talked up big time by Remainers in the UK too. Guess what - post leaving nothing is observably different. The average voter doesn't care about the sort of stuff thinktanks care about. Their concerns are local. A Republic of Texas probably wouldn't have invaded Iraq, and thus may in some sense be less superpowery than the USA, but does the average Texan see that as a problem or a benefit?

The UK has one of the six accepted world's "hard" currencies. Other countries with a similar GDP to Texas cannot issue a hard currency. International trade will still happen in dollars, although I suppose they could print a bill for internal use.

Russia, which has a similar GDP, didn't have any appreciable external debts denoted in rubles. They were denoted in dollars, pounds sterling or other hard currencies.

> also the ones that benefit most from federal spending

The analyses that draw this conclusion leave a lot out. By narrowing the discussion to spending, they ignore the many benefits of federal policy for corporations based in the big cities in a few states. A few industries come to mind that would make a lot less money if federal policy were different: banks, pharma, entertainment, and even technology.

> In reality the states that are most outwardly in favor of small/no federal government and "states' rights" are also the ones that benefit most from federal spending.

It's worth noting that the issue gets confused because of the makeup of the political coalitions in the US. Namely the party of "small government" is a coalition of social conservatives (who often are fine with government spending, so long as it's not forcing liberal social policy on them), and economic libertarians (who care deeply about low taxes and less business regulation, but aren't as sensitive to liberal social policy). The social conservatives bring the votes, but party has historically prioritized the policy of the libertarians.

Until relatively recently, it was actually pretty common for the states you speak of to send socially conservative Democrats to Congress. Over the last 15 or so years, the Republicans successfully exploited the compromises those Democrats were often forced to make with an officially socially-liberal party to defeat them electorally.

Also, as an anecdote, one of these states (North Dakota) could probably legitimately claim to be one of the most socialist states in the country. It literally has a couple major state-owned businesses.

If you took social issues off the table, I think you'll see those states behave much differently.

those social issues have often been used as drivers for support by politicians who use that support to push "libertarian" legislation.

California? What other states have wanted to secede recently?

> California? What other states have wanted to secede recently?

California did not want to secede. A Russian-linked group tried repeatedly over the 2016 to 2020 period to get an initiative for an independence referendum on to the ballot in the state, but never managed to qualify the initiative, much less pass the initiative calling for an independence referendum.

Brexit showed how politicians can lose control of their campaign speeches -- I personally do not believe it was what any senior politicians actually wanted.

Can you substantiate this or provide citations? Which states and how do you quantify "benefiting" from federal spending?

https://old.reddit.com/r/dataisbeautiful/comments/o1v3xl/oc_... maybe this thought process?

I am even less convinced now. Seems like a mixed bag.

Which part is a mixed bag?

It can’t be a mixed bag when it’s so heavily tilted with the blue states being better.

Those states benefit from Fed money because they have multiple century debt from lack of investment. "States Rights" is just about slavery and wanting it back, but that won't solve their problems with the investment they already are not doing and are unwilling to do.

"States Rights" was about slavery in the 1860s, but I doubt that most people who are into small government today want slavery back.

That was a large part of it, but it also had to do with taxation over building highways for trade in the north while the south had ample waterways to move trade goods... I'm not saying it wasn't about slavery as well, before anyone gets mad.

EDIT: https://medium.com/@jonathanusa/everything-you-know-about-th...

Those people who want small government always expand governmental powers when they are in charge. Example 1: Look at what the SCOTUS just did about the 4th amendment having no power for 100 miles inland from the border.

This is a remarkably bad argument. Many countries around the world have some sort of federal system. People who agree with each other enough to participate in some level of government together, but not enough to participate in a unitary government together, is a common problem that exists around the world. Federalism is a solution to that problem around the world.

Germany, for example, has "state's rights." Religious people in Bavaria decided that government buildings should display crosses (https://www.cnn.com/2018/05/31/europe/bavaria-germany-crosse...) and folks in Berlin don't get to veto that. When German press asked Angela Merkel why she wouldn't order a nationwide COVID lockdown, she explained German federalism, and the German press (which is much smarter than the American press) nodded and moved on. India features states that differ quite significantly in their healthcare systems or social laws. In Switzerland, a country the size of Maryland, laws on same-sex marriage differ between cantons until national consensus was reached less than two years ago.

America is a country of 330 million people, and far more diverse than Germany or Switzerland. Why should we ignore the real need for flexibility and localism just because some people who are long dead abused federalism?

Germany is not America. I'm not making the argument Federal power is bad, the people who benefit from it the most are, and are grifting the system by intentionally subverting anything that would improve their people's situation. Look at the build back better plan, they screwed that up and most of our highways are out of their operating life spans by more than double the original life time. Germany also was given a huge leg up after WW2 when all of FDR's constitution writers went over and basically gave you all the worker protections FDR wanted for the USA.

> Germany is not America.

Different groups of people wanting to cooperate to some extent but not be micromanaged by other groups of people isn’t unique to Germany. Federalism keeps recurring because it solves a recurring human problem.

> I'm not making the argument Federal power is bad, the people who benefit from it the most are, and are grifting the system by intentionally subverting anything that would improve their people's situation.

I like to assume that people are acting rationally in their interest given their values and priorities. People disagree about what would “improve” their situation,” or what will be the real outcome of efforts undertaken to “improve the situation.” Last I checked people are moving from California to Texas, not the other way around. Let’s assume at the very least people rationally appreciate the trade offs of that.

> Look at the build back better plan, they screwed that up and most of our highways are out of their operating life spans by more than double the original life time.

And why do you assume that Build Back Better would address that problem? I used to be a transit fan. I dutifully road Amtrak and Metro and MARC to work for years. And you know what? I gave up, moved to the exurbs, and bought a big SUV. Because we can’t actually do infrastructure and we shouldn’t even try. My change of heart was bitterly confirmed true when I saw the BBB proposal for Amtrak (which last I checked planned to blow tens of billions of dollars without building any new track).

Being from Bangladesh, I don’t actually believe that all cultures equally good at all things. Clearly Americans just can’t do things that require large scale coordination. Instead of beating our heads against the wall about it, we should just try to restructure our society to avoid those weaknesses.

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