Archive for February 19th, 2012

February 19, 2012

Parallel Attitudes Towards Transfer Payments in America & Greece

Written By: Matthew Oxenford

I’ve been struck by two stories running at low intensity on either side of the Atlantic for the last several months. At first, they don’t seem related. First, there is a notable uptick in anti-German sentiment that has been documented Greece and in several other countries that may need to be bailed out by the wealthier EU countries if the Euro project is to survive (See Reuters article from 16 February: “Greece-Germany tension rises, reflects wider European rift“). Secondly, the Republican Presidential primary in the United States has taken turn towards attacking the social safety net, even though the most reliably Republican regions of the United States are indeed the poorest, and most in need of the safety net (Paul Krugman’s recent article in the New York Times, “Moochers Against Welfare” is a good encapsulation of the trend). These seem unrelated, but they really have the same ultimate cause, one that has profound implications for both the United States and Europe.

The trend in the United States has been going on for longer, so let’s look at it first. Republican political rhetoric has been dominated by the trope that government should not be in the business of redistributing money to undeserving people even while the poorest of the U.S. States are the most reliably Republican. Every year, rich states, like Massachusetts, Connecticut and New York receive less than a dollar in federal spending for every dollar they pay in taxes.

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