RKMBs Forums .::Important::. Politics and Current Events No, 'blue states' do not bail out 'red states'

No, 'blue states' do not bail out 'red states'

Those arguing that “blue states” are the ones bailing out “red states” point to the federal “balance of payment” ratios, or federal tax dollars collected compared to federal money received, on a state-by-state basis. The states with lowest balance of payment ratios (collecting more federal taxes than they receive in federal funds) are Connecticut, New Jersey, Massachusetts and New York. The states with the highest balance of payments (receiving more federal funds than they collect in federal taxes) are Kentucky, New Mexico, Mississippi and West Virginia. Therefore, “blue states” are bailing out “red states” — or so they say.

But federal balance of payment ratios are not as indicative as pundits think they are. New Mexico is often deemed a “blue state” and West Virginia had Democratic control of the governor’s mansion and both state legislative chambers as recently as 2014. The relationship between state policy and balance-of-payment ratios becomes even weaker considering that North Dakota, New Hampshire and Nebraska — so-called “red states” — all have balance of payment ratios of less than 1.00. This means they receive less in federal funds than they collect in federal taxes, just like Connecticut, New Jersey, Massachusetts and New York.


In fact, 40 states have a balance of payment ratio higher than 1.00. Far from a dependency caused by state political leaning, it is typical for states to receive more in federal funds than they collect in federal taxes — an anomaly made possible only by rampant federal deficit spending.

Assuming data supported the claim that “blue states” bail out “red states,” using balance-of-payment ratios as a measure to support that claim is a non-sequitur, because balance-of-payment ratios depend entirely on federal tax and spending policy. The amount of federal revenue collected from state taxpayers depends mostly on state income, and the federal income tax levies higher rates on filers with higher incomes. Progressives designed the federal income tax to burden high-income earners on purpose and support policies to make the federal income tax increasingly weighted toward

Comparing Red/Blue state federal bailout money is a false comparison, economists, analysts argue

The argument that some Democratic “blue states” should receive more federal bailout money than Republican “red states” because their residents pay more in federal taxes isn’t really a comparison of apples to apples, economists and analysts note.

No state has the same budgetary or geographic-oriented needs and is not given equal amounts of federal subsidies even on a per capita basis, and several states have been operating failing fiscal policies for years before the coronavirus and even the Great Recession hit regardless of where their revenues came from.

New York Is No ‘Donor State’: Cuomo’s claim that the Empire State ‘gives’ more than it ‘gets’ is based on distorted measures.


As the July 31 expiration date looms over the Cares Act’s unemployment bonus, all eyes will turn to the next—and, according to Senate Majority Leader Mitch McConnell, the last—coronavirus relief bill. Chief among Democrats’ priorities is a “blue-state bailout.

They argue that high-tax states, which tend to vote Democratic, pay more in federal tax receipts than they get back, thereby subsidizing low-tax states, which tend to vote Republican. New York Gov. Andrew Cuomo keeps flogging a list of “donor states,” topped by New York, which “gave” $29 billion a year more than it “got” from 2015 through 2018.

Mr. Cuomo’s argument—that blue states like New York have lined federal coffers for years, so it’s only fair the feds return the favor—might be compelling if it were true. But the facts are sourced from a Rockefeller Institute report that miscounts what states receive. In truth, high-tax blue states are net “receivers” of federal funds, New York foremost among them.

The Rockefeller Institute’s “Giving or Getting?” report was published in 2017 and used soon after in a widely publicized Associated Press “fact check.” Since then, the report and its subsequent installments have served as the backbone of countless treatises like Paul Krugman’s sunny “The Moochers of Middle America.”

It isn’t so simple. A food stamp isn’t the same as a serviceman’s paycheck. The former can reasonably be characterized as a federal subsidy—“a gift” in Mr. Cuomo’s parlance—while the latter cannot. The Rockefeller report treats both as gifts, distorting who gets what.

Texas is home to nearly 219,000 military personnel, New York 60,000. It’s no surprise federal defense-related expenditures in Texas dwarfed those in New York in 2018, $65 billion to $14 billion. From this the Rockefeller report implies Texas got $51 billion more than New York—for the privilege of defending the whole country.
This doesn’t square. The lion’s share of what states get from defense spending is the protection afforded by national expenditures, not the in-state spending. For New York, this protection is worth a lot more than $14 billion. Using total federal defense-related expenditures as a proxy for this value and allocating it among the states by population, New York got $38 billion. With this one correction, in 2018 New York got $2 billion more than it gave.

The Rockefeller report also flatters the Empire State by leaving out the federal subsidization of municipal debt issuance. Washington lets states and localities issue debt that is tax-exempt at the federal level, thereby subsidizing each dollar of issuance. In 2018, New York issued $34 billion of long-term tax-exempt municipal debt; applying the Congressional Budget Office’s 2018 forward-looking estimate of 26 cents in federal subsidization per dollar of issuance implies roughly $9 billion in subsidies, increasing New York’s “take” in 2018 from $2 billion to $11 billion.

High-tax, high-debt blue states dominate this market. The four biggest—California, New York, Illinois and New Jersey—issued almost $91 billion in tax-exempt munis in 2018, about a third of all issuance, collecting nearly $24 billion in federal subsidies. These states reap the benefits while exporting the costs to entrepreneurs, who have to pay more for scarcer capital. Rather than conducting diligence on a small business looking for capital, wealthy households have been absorbing municipal issuance. They own most of it.

Municipal debt is irresistible to the wealthy because they can arbitrage the spread between their own tax rates and the average rate faced by the market-clearing bond buyer. A 2014 study suggested the top 0.1% of households use municipal debt to reduce their federal tax bills by an average of more than $42,000 a year. Blue-state politicians such as Mr. Cuomo benefit because they can avoid unpopular property taxes on the middle class while purportedly taxing the rich, who take their cut on the back end.

Finally, the Rockefeller report flatters high-tax states like New York, many of whose retirees migrate to low-tax states such as Florida, where they receive benefits. This allows New York to claim its residents pay an estimated $2 billion more in Social Security taxes than they receive in benefits. Logically, high-growth states with expanding working-age populations would register positive spreads on this metric. New York is neither while Florida is both. But the Sunshine State is saddled with a $21 billion negative spread, thanks to retiree flows. Neutralizing New York’s illusory $2 billion spread raises the state’s take from $11 billion to $13 billion.

In total, the four biggest blue states got from Washington $64 billion more than they gave in 2018. And even this figure might be too charitable, because it doesn’t account for the implicit socialization of their unfunded pensions and postemployment benefits, which totaled $790 billion at the end of 2017.

So a couple work and pays out more federal taxes in a state like New York and than retires to a low tax state. That state than enjoys a couple that has a stable income while NY loses it. That still doesn’t change where the feds got the money. The red state vs blue state crap really has taken off under Trump. He’s taken every opportunity to politicize disaster aid. Federally controlled land on fire? You can count on Trump blaming the state. NY being ground zero for Covid. Blame the state for the financial disaster while happily shoveling money to private industry bailouts.
This doesn’t make us a stronger nation but weaker one.

I think you miss the point, M E M.

The liberal couple who earns their income in New York state would gladly stay and pay the higher taxes on into their retirement, if not for the fact that New York has become intolerable even to liberals. If you have policies that de-fund police, enable crime, that encourages homeless people who poop on the sidewalk outside a nice restaurant where you pay for a nice atmosphere, where if you're a business owner homeless people urinate on your storefront and harass your customers, where homeless people are exposing themselves in the street, and threatening/harassing you and your children when you go outside. Where starting in the Obama era, the federal government subsidizes absolute scum to move to and live rent-free in nice neighborhoods to make them criminal-infested too, like the inner cities they came from... why would you stay?
Why would you NOT move to a place that doesn't have policies that create those situations?

The scary part is these people with their leftist values migrate away by the tens of thousands to places like Colorado and Texas and Arizona and Florida, and turn them blue states as well, and spread the policies that destroyed their own states to their new states.

But the first step is to not bail out these collapsing states, to let them face the consequences of their own choices, and force them to reform and govern more responsibly. Hopefully that day of reckoning is approaching for these shit-hole places. You couldn't pay me enough to live in New York city, Baltimore, Philadelphia, Detroit, Minneapolis, Seattle, Portland, San Francisco, or Los Angeles. And if I did live in any of those places for any length of time, I would have left them a long time ago.

Trump has made every offer to these places to send in National Guard and federal agents to stop the descent into chaos. These piece-of-shit Democrat mayors and governors have refused the aid, and demonized Trump for his sane offer to stop it. And in the example of Gov. Andrew Cuomo, who was given vast resources to reign in the Covid-19 pandemic, that Cuomo hosed away and killed a few thousand grandmas he could have saved with the medical resources Trump gave him. WHO IS POLITICIZING THE ISSUE, M E M?

That was rhetorical. We all know the answer.

I think it’s pretty clear Trump is blatantly politicizing Covid and disaster relief in general. He’s doing it with the fires in California and also with states and cities that have higher population densities. As has become painfully obvious Trump’s attempts to play down the pandemic and the push to reopen to quickly made the crisis worse. More death more prolonged economic damage. Instead of trying to unite the country we get separated into red and blue. As for the homeless, where is your compassion and empathy? You only speak of them as eyesores that ruin dining out. Do you have any interest in solving the problem? I also don’t get your logic with trying to hurt cities and states further by denying aid. Cruise lines and other private industries get baled out but not the cities and states that also had to shut down? It doesn’t make sense.

Actually on second reading, it occurs to me that the flight from Democrat states (due to rising taxes, increasing homelessness, decreasing police protection and escalating crime) is a more recent trend of the last few years. But that in fact, over the last 5 decades or so, retirees in New York state who pay into the system in New York and then retire mostly to Florida are officially "paying in" to the system, and then "taking out" or using benefits in Florida. Which paints them as welfare moochers in a red state (Florida), despite that they paid into the system when in a blue state (New York). Which the article clarifies, how Democrats are manipulating the numbers to demonize red states as the moochers.

We discussed this in another topic a few months ago, where M E M portrayed red states as moochers, and this article finally tries to clarify how that narrative manipulates the facts, and the article attempts to separate social security and police/military pension benefits away from actual welfare use, such as food stamps and benefits for illegal immigrants and medicaid.

You could still argue to death what should or shouldn't be included in the "moocher" category. There are a lot of ways to crunch the numbers. If a state has a militarily/geographically strategic location and has a higher number of military bases, that is a service vital to the nation that shouldn't be put a state in the category of "taking out more than that state pays in." But for a Democrat party that hates the military and hates the police, and basically hates America and its "structurally racist white privelege system", I'm sure it is.

I don’t consider people receiving benefits that they paid into as mooching. And states value those residents that have a stable monthly disposable incomes that the retired and military bases bring in. Your bs with “dems hate...”. is partisan garbage and shows off your vile hatred. I don’t hate cops but the system needs to be changed so bad cops don’t get protected. I could be wrong but I think many (most) republicans can agree there needs to be some changes.

Democrats do hate the police. Their endorsement of Black Lives Matter, and their absolute refusal to defend the police in cities nationwide makes that clear. Police benevolent associations that endorsed Obama/Biden in 2012 and Hillary in 2016, and were in the Democrats' pocket for a hundred years, are overwhelmingly endorsing Trump in 2020.

Likewise, the slashes in spending to our military, where 50% of U.S. military aircraft were not combat-ready in Jan 2017 when Trump was inaugurated, and where soldiers were dying in unprecedented numbers because of accidents and poor training due to inadequate funding in the Obama years, also make clear the Democrats' contempt for our military.
Hillary Clinton hated police and military so much while she was First Lady that they could not wear uniforms to the White House, and they had to wear business suits rather than their uniforms. It''s well documented that Bill and Hillary called them "pigs", and that Chelsea Clinton learned to call them that from her parents. Among Secret Service agents, it was considered punisshment detail to be assigned to protect Hillary Clinton, she conssistently treated them so badly.

On multiple occasions during Obama's presidency, soldiers were killed in terrorist incidents and Obama did not respond or mourn their deaths, and only when chastised for it in the media on some occasions would reluctantly acknowledge their deaths weeks later.
On two occasions during Obama's presidency, two separate U.S. marine weres falsely imprisoned in Mexican prisons and mistreated to the point they almost died in prison before finally released. On both occasions Obama never made any public statement or appeal to the Mexican government to release them. Even as Obama during the same period publicly mourned the death of criminal thugs like Michael Brown and sent DOJ officials to attend Brown's funeral in Ferguson, MO. And Obama mourned the death of Fidel Castro, and opened up economic ties with Cuba that benefitted and funded that Marxist regime.
Obama's justice department did everything it could to destroy officer Darren Wilson who shot Michael Brown, never voicing the slightest possibility that the officer had acted properly, and after several months of investigation where Obama's DOJ bent over backwards to find Wilson guilty of something, anything, despite their partisanship found nothing improper, found no evidence of wrongdoing, and in a quiet Friday night document dump, reluctantly said that Wilson had done everything in accordance with proper police prrocedure. For no logical reason, Wilson was fired anyway. No comment or intervention by Obama to stop it.
In the last year of Obama's presidency, multiple police officers were shot by Black Lives Matter protestors in cities nationwide. Obama never condemned the shootings, and instead invited the Black Lives Matter leadership to the White House. People who led chants of "pigs in a blanket, fry 'em like bacon!" he invited to the White House.

In the Cambridge, Massachusetts case of a black college professor who was arrested breaking into his own home when he mouthed off to the officers called to investigate the break-in, Obama without knowing the full facts impulsively said "The police acted stupidly..."
That eventually resulted in a ridiculous "beer summit" that was something of a half-hearted apology to the officer. Obama's first impulse, without knowing the full facts, was to side against the police.

So that's considerable evidence to prove that Democrats consistently hate the police and our military.

Since at least the Carter administration, Democrat administrations consistently slash military spending to fund their pet social programs. Former Reaagan-era assistant defense secretary K.T. McFarland said that in 1981 after just four years of Jimmy Carter's presidency, when the Reagan administration came in, there were F-16's on the runway whose job was to scramble and intercept enemy aircraft that came into U.S. airspace, that at the end of Carter's administration were not budgeted to have the feul to leave the ground.
After 4 years of Carter, how much worse the damage to our military from 8 years of Obama? Trump in a rush to rebuild requested $700 billion to rebuild the military. The Democrat-controlled House was non-compliant, and extorted another $900 billion for a total of $1.6 trillion to finally cooperate in giving the requested military funding. And then bemoaned Trump's deficit spending, that they themselves hyper-inflated!

So it's not "hate" to say that Democrats have contempt for the police and our military, and neither fund or vocally support the police or the military. There is considerable evidence to make clear that is the case. Democrats de-funding police departments in Democrat- controlled cities, at a time of escalating violence and looting that Democrats' own negligence has caused is just unconscionable.

Yeah it’s hate when you say democrats hate the police and military. Than again you think somebody who rode on the Lolita express and partied with Epstein is a great man. We have different values. I will be proudly voting for Biden who is for increasing the number of cops in communities. Biden never would have been picked if Democrats hated cops. You will be voting for a corrupt lying pos that is already declaring that if he loses it’s because the election was rigged. How much do you hate democracy?

It's hate when I expose your side's hate?!?

I cited the facts above, you've offered nothing to disprove what I cited.

As I mentioned Biden is planning on increasing the number of police. That’s because democrats want that and picked him to be our nominee. Biden helped clean up your parties last disaster, hopefully he can do it again with Harris.

Biden and the Democrats are a paper tiger. Their vows to increase police presence is mere lip service, that they have no intention of following through on. Biden and the Democrats are pandering to Black Lives Matter and Antifa. This is their political base, the anti-police far-Left! You're either flatout lying or deluding yourself. And the Democrat far-Left knows this, if there is Democrat control of the presidency, the Left will run wild and exponentially step up the violence, confident that Democrat leaders have absolutely no will to stop them.

30 years ago, Biden was part of the legislation under Bill Clinton to put 100,000 more cops on the street, and vastly increase by the millions the number incarcerated in profitable private-corporate-run prisons. But Biden has abandoned that stance, to side with the anti-police Left.
Then and now, Biden has no principles, he just chaameleon-like, panders to whatever he thinks the public wants to hear, no matter how destructive the policy. So long as it enriches himself and and his family. Biden would literally sell us out to the Chinese, and to anyone else who would buy him off, and has a decades-long history of doing exactly that. Selling his political office to the highest bidder.

Uhm Biden already has a record of supporting and increasing the number of police. Trump now has a record of rising civil unrest and denying aid to “blue” cities. After almost 4 years this is Trump’s America.

“I take no responsibility “ is Trump’s motto.

Are you mentally damaged?
I JUST SAID Biden has reversed himself from his 100,000 cops policy of the 1990's, and is now sided with de-funding the police. Virtually every police association that previously endorsed Democrat presidential candidates, are now 100% endorsing President Trump in 2020. They know how anti-police both Biden and the entire piece-of-shit Democrat Bolshevik party is.

You're not fooling anyone, M E M.

The "rising civil unrest" is 100% owned and orchestrated by the Democrats. Trump is just trying to stop it. And when Trump actually sends in federal agents and national guard to do so, Biden and the other Democrat leaders, from local Dem mayors and governors to the Hose and Senate leaders, call them "storm troopers" and "nazis".

Biden is literally campaigning on adding more police to communities right now. He has a legislative record of doing just that. Thems the facts WB. Do you support Biden being for more police in communities?

And part of the problem is police unions being so powerful that it protects bad cops. It’s almost impossible to get rid of the bad cops. Of course they want less accountability and support Trump. The status quo though isn’t working obviously though.