6/05/2012

"Florida versus Spain"?: How Krugman misinforms readers

Paul Krugman claims that Florida is doing well relative to Spain because Florida has gotten so much aid from the Federal government.
Aid on that scale is inconceivable in Europe as currently constituted. That’s a big problem.
Brad Plumer in the Washington Post writes:
Paul Krugman points out one big factor: Florida has received billions of dollars in aid from the rest of the United States. The state’s federal tax revenue fell by $25 billion between 2007 and 2010, but Florida didn’t have to make up that entire shortfall with growth-pinching austerity measures, the way Spain now does. Instead, the U.S. Treasury kept paying Florida’s Social Security, Medicare, and Medicaid bills. The federal government also sent an additional $6 billion in unemployment aid and food stamp benefits to Florida between 2007 and 2010. All told, Florida received at least $31 billion in outright assistance from the rest of the country in those three years. That’s the equivalent of 4 percent of the state’s GDP. And, while Florida’s economy is still struggling, things could be a lot worse. They could be like Spain, which never received this level of aid from the healthier regions of Europe. . . .
Yet, though the end of last year, Florida is one of the 31 states that receive less than the average amount of Stimulus money from the Federal government.  Given that the money for the Stimulus has to come from someplace, if you assume that the money that is being transferred to the Federal government is being equally taken on a per capita basis from all the states, Florida is actually a net loser from all this help that the Federal government is giving out.

 
Don't you think that it would have been useful for Krugman to acknowledge how little Florida received relative to other states?

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