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One State, Two State – Red State, Blue State December 10, 2008

Posted by Kate Ryan in Auto Bail-Out, Economy, National Politics.
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If you are a resident of the “Unreal America” as I am, you can not help but notice the inequity of how we are treated by the federal government. While the northeast and midwest have been rusting and on life support for the past 30 years, the south and mountain west have been flourishing – usually at our expense. And what is different about those states, you may ask? Just take a gander at the electoral map. Even in this year of change, they are redder than red. Unreal America is blue.

It wasn’t always this way. For many years, the south was reliably Democratic. The Civil Rights Act pushed many of the states toward Republican rule, but what – or who – really sent them over was Ronald Reagan. Reagan’s emphasis on “values” and social issues turned a lot of centrist to conservative southern Democrats into Republicans. And oh my, how they were rewarded! Lots and lots of federal money came flooding in.

In 2005, the last year tax data is available, the top 10 recipients of federal dollars were red states (NM, MS, AK, LA, WV, ND, AL, SD, KY, VA). The top recipient, New Mexico, received $2.03 in federal spending for every tax dollar it sent to Washington (I know, New Mexico went blue in this election, but it was red for about a billion years before 2008). Contrast that with the state to receive the least amount of federal spending – New Jersey – at 61 cents received for every dollar sent. Eight of the bottom 10 states are all blue (NY, CA, DE, IL, MN, NH, CT, NJ). Of the 17 states that receive less than a dollar in federal funds for each dollar sent to Washington, only four have been reliably red states (FL, TX, CO, NV).

So why does this have my knickers in a knot today? Overnight the White House and congressional Democrats hammered out an agreement in principle to make a $15 billion bailout to the ailing Big Three U.S. auto makers. Approval of the agreement, however, hinges on the approval of Senate Republicans. The most conservative Republican Senators, however, say that they will not support the legislation unless it forces the auto makers to file for bankruptcy. And who are the loudest conservative voices against the rescue package? Why our friends Jeff Sessions and Richard Shelby of Alabama as well as Bob Corker of Tennessee, of course.

Alabama and Tennessee are home to several foreign auto manufacturers. Toyota, Hyundai, Volkswagon, and Honda are all building cars in factories that taxpayers paid for – and are continuing to pay for through yearly tax abatements for jobs. Shelby has said that the State of Alabama built the factories to attract the jobs – but the money came from somewhere. That somewhere is from all of us blue staters. Alabama receives $1.66 in federal appropriations (and Shelby just happens to sit on that committee) for every dollar sent and Tennessee gets $1.27. Poor Michigan – where our auto industry sits – gets only 92 cents.

I predict that the auto rescue will pass without the likes of Sessions and Corker. It will take moderate Republicans and those from the industrial north to do it. It would truly behoove them to give their support as the new Democratic Congress may not be seeing so much red when it passes out cash in the future.

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1. The Economy » Blog Archive » The French have Discovered That Obama is an American - December 10, 2008

[…] One State, Two State – Red State, Blue State « Kate’s Kitchen Table […]


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