The Spirit of the 99 Percent

Matt Yglesias breaks it down in context of the redistributive benefits of common currency:

Kentucky (population 4.3 million) and the San Francisco/Oakland/Fremont Metropolitan Statistical Area (population 4.3 million)…share a currency. San Francisco’s workers are much more productive, earning a median household income of $74,000 to Kentucky’s $40,000…

Kentucky is full of doctors and hospital administrators who think of themselves as hard working, highly educated professionals working in the private sector. But they’re living in a dreamland where their customers can afford their services thanks to taxes paid in San Francisco. Absent Medicare and Medicaid, health care professionals in Kentucky would see their incomes plummet with secondary consequences for the people who those professionals buy goods and services from. Nor does San Francisco demand any kind of conditionality for this assistance…

And yet, while there of course are people who argue for making the tax code more regressive, for cutting Medicare, and for cutting Medicaid there’s nobody who runs for office by objecting to SF/Kentucky transfers as such. What we have is a classic left-versus-right dispute about progressive taxation and income redistribution. That’s because Americans, whether in San Francisco or in Kentucky, generally conceive of ourselves as all living in one country. We act either on behalf of narrow personally selfish claims or else broad idealistic concerns about what’s right and proper for the country as a whole. But if that spirit broke down, the whole national economy would have a very different feel.

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