Monday, August 15, 2011

Ohio is still a donor state

The Economist is a British publication that many business people and I have long respected. One other virtue of The Economist is that it is not an American mainstream medium that would therefore subject itself to self-censorship. Therefore, I sit up and take notice when it issues a statistical table of the fiscal money flows between Washington and the states. In The Economist's Daily Chart blog (Aug. 1), the cumulative flows during the 1990-2009 period are documented for each state and Puerto Rico.

Ohio, the state that supposedly decides the course of Presidential elections, finished 7th worst on the list, sending more than $300 billion to Washington in that 20-year period that never came back. Here are the numbers (all figures are in billions)

What Ohio paid in federal taxes 1990-2009:     $1,569.3
What the feds sent back to Ohio 1990-2009:    $1,265.8
Taxes minus spending:                                   $   303.5

Ohio Gross Domestic Product, 2009:                $   462.0
Taxes minus spending as a percentage of
Ohio Gross Domestic Product:                                66%

Ohio has lagged the nation in economic recovery for many years, but has sent the equivalent of its entire output of goods and services for 8 months to DC for no other purpose than to support the federal government and other states.

Let's take this one step further. Assume Ohio's GDP has been essentially flat since 2009. The Fiscal Year 2012 state budget is $26.9 billion, which is 5.8% of the 2009 state GDP. Let's apply that 5.8% to one-twentieth of the $303.5 billion (average annual outflow, $15.1 billion): Do you think that if the State of Ohio had $873 million more per year in the last three or four years, the state budget crisis would have been easier to resolve?

Now, please explain to me again how remaining in the Union is in Ohio's interest? Especially if the purpose of government is to protect the lives, liberty, and property of its people?

Virtual buckeye to John Stewart.

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