Saturday, May 12, 2012

Germans Call It a Bailout, We Call It Missouri

It’s hard in America to understand how screwed up the European Union is.

Part of the reason is that we’re way more of a union than they are.

Derek Thompson at The Atlantic produced this graphic:

This is a bit difficult to understand, so let me walk you through it.

  • The first row of numbers is the share of the economy for states. The last entry on the right is 5 big states combined together.
  • The bars in the chart are the ratio of federal outlays paid out to a state divided by federal revenues that come in from a state. So, Missouri gets a lot more than it pays for.
  • The bottom row of numbers does the same thing for Europe. Portugal and Greece are “states” that are about the same relative size as Missouri and Tennessee.

The U.S. makes places like Missouri work by supporting them. Essentially this is welfare for states.

Thompson’s position, is that if bigger European economies did this for Greece and others, the problems might go away.

I don’t think that follows, but it is a useful idea to carry forward.

Via I Love Charts.

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