Tuesday, September 09, 2008

McCain Admires Welfare State

This, at least, is a reasonable conclusion to draw from his selection of Julia Louis-Dreyfus as a running mate.  

After all, she comes from Alaska, a state in which the great bulk of public funding, including direct payments to citizens by the government, is supported by two things:  (a) oil companies, and (b) Washington.

As Michael Kinsley explains in Time, the Last Frontier is a fiscal conservative's nightmare. It ranks #1 in taxes per resident, and #1 in spending per resident.  Alaska both taxes and spends at more than double the national average. 

But there's a catch, and this catch is what allows Alaskans to maintain the Potemkin-village veneer of rugged conservatism.  Most of those taxes are paid by somebody else -- specifically, by us in the Lower 48.  Alaska's treasury collects a staggering 75% of the value of each barrel of oil before it leaves the state.  That can only increase the cost of oil to the rest of us.  Probably not by much, for the same structural reasons that more drilling in Alaska won't lower our prices by much.  But still -- when each Alaskan gets a whopping $2,200 annual check from the government, that is money paid by drivers in the rest of the country. 

And yes, those direct payments have gone up substantially because of rising gas prices.

The money from Washington can be measured as a surplus of federal spending above federal taxes; Alaska ranks second or third per capita, and first in actual dollars.  This is basically a transfer of wealth from other states -- specifically, states that begin with the letter "N" -- New Jersey, Nevada, and New Hampshire.  Go figure.  (To find out how much your own state pays Washington versus how much it receives, click here.)

In other words, Alaska is a massive welfare state, supported by corporate taxation, high gas prices, and federal handouts.  We're not sure that governing it would prepare anybody to deal with the colossal deficits racked up by the fiscal profligacy of the Bush administration.

2 comments:

mark said...

Did you mean "N" states including New Mexico?

Father said...

Ah -- so now we know that some very attentive readers actually follow the links! No, New Mexico is, along with Alaska, the other big lottery winner. And again: so much for the West and its supposed culture of self-reliance.