1. In the US, states aren't responsible for bailing out banks the Federal Reserve is. You don't see things like Ireland having to bail out a bunch of insolvent international banks.
2. In the US you see about 100-200 billion a year in transfer payments. I've come to believe that these are essentially compensation paid to states with weaker economies to compensate them for having to do business in dollars.
3. Social Security and unemployment insurance are Federal not, not state programs. And exception is state pensions, where there are indeed problems.
4. Most states are limited in the ways they can borrow money and don't run deficits that are large percentages of GDP.
5. Politically there is a difference. With Greece when I talk to Europeans there is this a reflexive desire to impose collective punishment on the Greeks. You just don't see that in the US. I think that frees US policy makers to take practical measures that aren't available to the Europeans. Consider Puerto Rica, about 40% of the population of Greece, half the total debt. Just said, they're broke. As an American... oh well sucks to be a creditor. But the Federal Reserve isn't going to cut off banking in Puerto Rico and force them to do a fire sale of civil assets like the EBC.
How many states do you have where SS pays out pensions to people over 56 while people in the other states work until 65 or 67 and are supposed to fund it?
SS in the us is funded via a Federal tax on wages. Rules are uniform over the entire country. Also Social Security Disability Insurance covers disabled people, and it too is a Federal not state program.
Unemployment insurance is a Federally mandated program that's administrated by the states. In 2009 California's unemployment fund was depleted and the Feds just loaned California money. Currently our fund is in the red by 8 billion. Does anyone care? No.
1. In the US, states aren't responsible for bailing out banks the Federal Reserve is. You don't see things like Ireland having to bail out a bunch of insolvent international banks.
2. In the US you see about 100-200 billion a year in transfer payments. I've come to believe that these are essentially compensation paid to states with weaker economies to compensate them for having to do business in dollars.
3. Social Security and unemployment insurance are Federal not, not state programs. And exception is state pensions, where there are indeed problems.
4. Most states are limited in the ways they can borrow money and don't run deficits that are large percentages of GDP.
5. Politically there is a difference. With Greece when I talk to Europeans there is this a reflexive desire to impose collective punishment on the Greeks. You just don't see that in the US. I think that frees US policy makers to take practical measures that aren't available to the Europeans. Consider Puerto Rica, about 40% of the population of Greece, half the total debt. Just said, they're broke. As an American... oh well sucks to be a creditor. But the Federal Reserve isn't going to cut off banking in Puerto Rico and force them to do a fire sale of civil assets like the EBC.