A Closer Look at ‘Federal Dependency’ in Republican-Dominated States

A recent article by Steve Hanley in a website that showcases developments in green technology revisited the narrative that red states are on average more “financially dependent” on the federal government. This issue has been raised in the past to discredit fiscal conservatism and dismiss the role of efficient stewardship in states with lower taxes, presuming that it is their reliance on Washington that makes these policies “more affordable”. The most straightforward methodology for measuring “federal dependency” of states was presented by Ryan McMaken in the Mises Institute blog. Based on “federal spending per dollar paid”, business-friendly states like Texas and Utah among the net recipients of federal funds. McMaken attributes the federal budgetary shortfall in states like these to differences in urbanization and federal land ownership. Regression analysis supports McMaken’s assertion that federal land ownership and...(Read Full Article)

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