The problem with our states is that they're not countries... economically speaking, that is...

underpaidgenius:

“The lack of coordination within the United States — and, equally important, the failure to recognize the states as macroeconomic players — helps explain our sluggish recovery. To make matters worse, several states have country-sized G.D.P.’s, but none has the macroeconomic tools of an independent country. Every state except Vermont has some sort of balanced budget requirement that prevents it from weathering a recession by running up big deficits to keep teachers employed, students in college, welfare payments flowing and construction humming. Nor can New York and California stimulate their economies by, say, printing more currency. Instead, states are managing huge budget crises with the only tools they have, cutting spending and raising taxes — both of which undermine the federal stimulus. That’s why the best booster shot for this recovery and the next would be to allow states to borrow from the Treasury during recessions. We did this for Wall Street and Detroit, fending off disaster. It’s even more important for states.”

—

Christopher Edley, Let Treasury Rescue the States

| The Supply Siders are going to love this idea.

Meh—I think I’d rather see New York and California secede.  Honestly, that’s where we’re headed—unless we actually want to let the USG drag us down with it. 

Hell, the world runs on money, right? So let’s act that way, dissolve the United States of America and reform all fifty of us into an EU-style economic entity. “The United Economies of America” aka the UEA.

Don’t get me wrong—I don’t want this to happen—but seriously—this is the way the world works and it’s high time we stop the lies and admit that our economy would be hella-more stable if we let government be more local and economy be more distributed.

Why keep pretending money isn’t king when it clearly is?