TIME TO UNLOAD KENTUCKY
Running the country like a business means we can’t carry unproductive states
We’re told that with President Trump as our nation’s CEO, America will now be run more like a business. The first thing he should do is stop the hemorrhage of cash in money-draining operations.
One of our worst performing states is the very Republican state of Kentucky (in 2016, it gave Trump 62.5% of its votes). It’s an embarrassing drag on our nation’s budget and economy. WalletHub identified Kentucky in 2017 as the state most dependent on the federal government, and a 2007 Tax Foundation Study (examining the period 1981-2005) found that Kentucky consistently received more from the federal government than it paid in.
In fiscal 2016, which ended Sept. 30, the federal government collected $33 billion in taxes from Kentucky but spent $89 billion there — resulting in a net benefit to Kentucky of $56 billion (more than $12,500 for each person in that state). By contrast, the federal government collected $109 billion in taxes from Massachusetts in 2016 but spent only $62 billion there. That’s $47 billion less than it paid in taxes. AN ECONOMIC LOSER To Make America Great Again, we can’t afford any namby-pamby political correctness — we need to tell it like it is. Low-productivity states need to carry their own weight or go, and Kentucky looks like a good place to start America’s transformation. Kentucky shouldn’t get a dime more from the federal government than it pays in federal taxes. If it can’t live on a budget, it should be shut down. That’s the way we’d do it in the private sector.
Let me spell this out in more detail. Kentucky’s median household income is $44,000 a year, while the national median household income is $54,000 a year. In high-performing Massachusetts, it’s $69,000 a year. The portion of Kentucky’s population living in poverty and presumably using federal programs (such as food stamps) is above the national average and more than 60% higher than in Massachusetts.
Given our progressive tax system (higher-income people pay more in federal income tax), Kentucky pays less in taxes. But because it has more poor people as a percentage of the population, it takes more money from federal safety-net programs.
Kentucky’s not only an economic loser, its leading representatives in Washington are disruptive and arrogant. Republi- can Sen. Mitch McConnell recently used his position as majority leader to silence Democratic Sen. Elizabeth Warren (from highly productive Massachusetts) during a Senate debate.
In the private sector, the representative of an underperforming unit (such as Kentucky) would never order the representative of a highly successful unit to sit down and be quiet. If the GOP is truly committed to running America like a business, it should demand McConnell’s apology or resignation for his outrageous treatment of Warren. FEDERAL GRAVY TRAIN McConnell and fellow Kentucky Sen. Rand Paul often pontificate about the virtues of small government. But they aren’t interested in getting their state off the federal gravy train, or explaining Kentucky’s dependence on the federal government to their voters. As New Jersey Gov. Chris Christie said in a 2015 GOP presidential debate: “If Sen. Paul wants to start looking at where he’s going to start to cut spending ... maybe he should start cutting the pork-barrel spending that he brings home.”
Kentucky isn’t the nation’s only underperforming, moneydraining state. Whatever solution we find should be rolled out to other low-productivity states., such as the GOP stalwarts of Alabama, Mississippi and South Carolina. Further, if Republicans are serious about shrinking government, they should remove McConnell as Senate majority leader. The private sector wouldn’t put a drug addict in charge of a pharmacy. It’s equally dubious to put a representative from a state addicted to federal money in charge of the Senate.
One major reason for the U.S. government’s dysfunction is the GOP’s hypocritical grandstanding about wanting smaller government and running America like a business when, in fact, it needs big federal government programs such as the military, Medicaid, food stamps and farm subsidies to keep many of its supporters afloat. If Republicans really believe in the snake oil they’ve been selling, it’s time to show it. If not, it’s well past time for them to stop their empty ranting.
As Shakespeare would have said, it increasingly sounds like a tale told by an idiot, full of sound and fury, signifying nothing.
Steven Strauss, a visiting professor at Princeton University’s Woodrow Wilson School of Public and International Affairs, is a member of USA TODAY’s Board of Contributors.