The U.S. has Mississippi, the euro zone has Greece. Here, we write checks to Mississippi in the form of Medicaid and unemployment insurance. There are no checks when Greece needs help covering its bills, it’s just chaos. Michael Cembalest, a JP Morgan analyst, put together a graph which shows money transfers between American rich states—California, Connecticut, Illinois, New Jersey, New York—and poor states like Tennessee. If similar transfers existed in the EU, the rich north would have to send Portugal and Greece an additional 30 cents for every dollar paid in taxes, year after year. Being more like the U.S. might not be a bad idea if it meant balanced budget laws and seamless fiscal transfers.
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