Friday, February 06, 2009

Basic notions of fairness

Matt Welch at Reason complains about the stimulus package:

Why do people oppose the stimulus? Here are a few actual reasons: There is no strong evidence that stimuli work, and plenty of evidence that they don't (a relevant consideration, no?). Like the deeply flawed PATRIOT Act, the deeply flawed Iraq War resolution, and the deeply flawed bank bailout, it is being rushed through the legislature in an atmosphere of pants-wetting crisis and presidential warnings of impending doom. It is filled with special interest giveaways, big-government featherbedding, and "Buy American" considerations that have about as much to do with stimulating an economy as playing violin has with putting out fires. By taking from fiscally responsible states (like South Carolina) and giving to fiscally irresponsible states (like California), it violates basic notions of fairness and creates still more moral hazard in an already hazardtastic universe. These will do for starters; there will be more and better reasons in the comments.

We can argue later about "special-interest givewaways" and big-government featherbedding, but let's talk about his claim that it violates basic notions of fairness to use some of "responsible" South Carolina's federal tax dollars to bail out California. South Carolineans (based on 2005 numbers) paid about 22 billion in federal taxes, and were the recipients of 30 billion in federal spending- an 8 billion net for their state, and a return of about 1.35 on their federal taxes. Californians on the other hand paid about 290 billion in federal taxes, but only got 242 billion of it back- a loss of 48 billion dollars and a return of .80. Now, that 48 billion dollars went someplace... and I'd guess that maybe 8 of it went to South Carolina.

Now Matt, explain to me again how it's unfair for federal $ to be used to help balance California's books?

No comments: