> An interesting chart...
>
> http://www.economist.com/blogs/dailychart/2011/08/americas-fiscal-union?page=2
>
> I've got several questions about the United States, obviously prompted by the eurozone debate over fiscal union:
>
> 1. Why, unlike in Europe, are voters in wealthier US states like Minnesota, New Jersey, Illinois, Connecticut and New York relatively unperturbed by fiscal transfers to poorer states like Alabama, Mississippi, Montana, and West Virginia? Has this always been the case, including during the American constitutional debates of 1787-1793?
The answer is pretty obvious, no? Imagined communities, etc? Why do the folks in Munich object to paying for the Greeks' unemployment benefits, but not so much to paying for the Dusseldorfians' benefits? Why would the Nicois never accept paying benefits to Italians in Turin (right across the border), but it's okay to pay them to Bretons (much further away)? Same thing. By the way, in 1787, federal redistribution was tiny, mostly to do with the post office.
> 2. Does the fiscal union impose spending discipline on the poorer states? Do federal transfers come with strings attached, i.e. federal control over state spending?
Federal money often comes with strings attached, but usually in the direction of requiring *more* state spending (i.e., matching requirements or mandated minimum benefit levels). State-level spending discipline comes mostly in the form of state-level constitutional balanced budget requirements, and I don't think the fed. gov. has ever mandated or interfered in that area. I think every state but one or two has a balanced budget requirement. But they usually permit deficits run for capital projects (school building, etc.)
> 3. Do the corporations based in the richer states which support these transfers have any interests other than maintaining these markets for their goods and services?
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> It seems ironic that the states which most benefit from federal handouts consistently support the Republicans and are ideologically hostile to "Big Government", while the opposite is true for the richer states whose taxes are funnelled to the poorer states. But poor rural states and regions generally tend to be more conservative than more economically advanced ones with large urban working class populations.
There just isn't any geographically based interest like this in the U.S. - it's not like in Europe. National identity means something.
There were strong regional economic conflicts of interest in the nineteenth century, but these weren't fiscal, since the fed gov spent very little money. They were about monetary policy and the tariff. (The exception was pensions for Union veterans, which, as you can imagine, were unpopular among Southern congressmen.)
If you're looking for contradictions, why does the Chamber of Commerce not support a big stimulus package, since that would increase profits?
SA