Smart Republicans, Stupid Democrats
If Democrats are the big spenders, why do Republican states get the money?
One of the co-chairmen of President Obama's bipartisan debt reduction council recently got in trouble for telling a women's advocacy group that Social Security had "reached a point now where it's like a milk cow with 310 million tits!"
If you guessed it was the Republican co-chairman and not the Democrat who said it, you would be right—it was former Wyoming Sen. Alan Simpson—but therein hangs a tale.
Republicans have a near monopoly on complaints about government spending. Dozens of new Tea Party candidates were elected to Congress on a promise to clean house. But data going back two decades—to stick to Simpson's crude metaphor—show the milk is mostly coming from Democratic states, and the sucking is being done by Republican states.
The "red" states up in arms about government spending receive the largest share of it. This is not a new finding, but research by economist Gary Richardson at the University of California-Irvine backs it up. Richardson provides insight into how the paradox came about and what it means for the future.
It isn't surprising that the more Republican a state leans, the more likely it is to be furious about government spending. But what is surprising is that states with the highest anti-spending sentiment appear to be the largest beneficiaries of government spending. Not only do red states swallow the lion's share of government spending, but Richardson found a linear relationship between the extent of GOP support in a state—and, by implication, the fervor of its anti-government sentiment—and the amount of federal largesse the state receives.
Alaska, home to Sarah Palin, and where two fiscally conservative Republican candidates for Senate recently mopped up 75 percent of the vote between them, received $1.64 in federal benefits for every $1 the state contributed to the national kitty. Massachusetts, Richardson found last year, received 82 cents for every dollar it paid into the national pool. No doubt as compensation, liberals in Massachusetts and other "blue" states also received lots of vitriol for being such out-of-control spenders.
The 28 states where George W. Bush won more than 50 percent of the vote in 2004 received an average of $1.32 for every dollar contributed. The 19 states where Bush received less than 50 percent of the vote collected 93 cents on the dollar.
"Voting Republican paid large dividends," Richardson wrote in a piece published in the Economist's Voice. "For each 1 percent of the population voting in favor of the Republican presidential candidate, the state received an additional 1.7 cents in benefits for each dollar in taxes."
No sane person would argue that every state should get precisely as much as it puts in. Different states will need larger or smaller benefits at different points of time. But Richardson's data don't just show that the redistribution of resources correlates with a state's political orientation. They show that the amount of money being collected from Democratic states and redirected to Republican states has systematically grown over time.
During the 1970s and 1980s—throughout the Carter, Reagan, and George H.W. Bush administrations—there was no correlation between anti-spending sentiment and getting lots of federal money. The net return to states that voted for Republicans was relatively flat, meaning that "red" states didn't get most of the pie.