On states that bite the hand that feeds them.
 | Outside a post office in the aftermath of a tornado in Mayfield, Ky., on Sunday.Adrees Latif/Reuters |
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On Friday, a devastating swarm of tornadoes swept through Kentucky. The state's leading figures appealed for federal aid, which was promptly granted — and rightly so. Helping people and communities in need is what nations are supposed to do. |
Observers couldn't help noticing, however, that some of the Kentucky politicians asking for aid — notably Senator Rand Paul — had in the past not only opposed aid for other disaster-struck states but sneered at their pleas. What should we make of this hypocrisy? |
The truth is that it runs deeper than "aid for me but not for thee." Remarkably, if you look at how the federal budget affects U.S. regions, there's a consistent pattern in which conservative states that preach the importance of self-reliance are in fact heavily subsidized by liberal states, especially in the Northeast. |
The Rockefeller Institute publishes regular estimates of states' "federal balance of payments" — the difference between the amount the feds spend in a state and the amount they collect in taxes. In Virginia and Maryland a lot of federal spending consists of the salaries of government workers. Elsewhere, however, it's mainly Social Security, Medicare and Medicaid, plus some military spending. Here's what the map of per capita balances of payments looked like in 2019: |
 | Acelaland pays the bills.Rockefeller Institute |
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Topping the list of net beneficiaries was, yes, Kentucky, where residents received an average of $14,000 more from Washington than they paid in taxes. To put this in perspective, Kentucky's 2019 net inflow of federal funds — $63 billion — was roughly 30 percent of the state's G.D.P. that year. |
Economic geographers often interpret regional economies using the "base-multiplier model." The idea is that what drives a local economy is its "export base," the stuff it sells to other places; the income generated by that export sector in turn supports jobs in local services, from health care to restaurants. The economy of New York City, for example, is largely driven by the financial industry; the money earned there directly or indirectly supports most of the city's other jobs. |
So what is Kentucky's export base? Not the traditional industries: In 2019, the state, which has more than four million residents, had fewer than 6,000 coal miners, while the distilling industry — which, to be fair, has been growing — employed only about 5,000 people. On the other hand, more than 250,000 Kentuckians worked in health care and social assistance — and who do you think paid for a lot of that? So, in a real sense … |
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