Sunshine makes the state grow
Political, Economics ·Saturday May 7, 2011 @ 17:51 EDT (link)
There is I find a correlation to having great natural resources and high taxation and welfare statism. Areas with such resources - international ports like NYC, or sunny California - can attract more people, ceteris paribus, than other areas. They are in effect high-demand. So they can raise taxes without significantly affecting their population (to a point) whereas some town in Alabama could not because people would just move (not to pick on Alabama, just as an example). Heck, economically it's sound (if we disregard that taxation is coercion rather than a market price) to charge whatever the market will bear until equilibrium price (and population) is reached; look instead at property prices if you will (location, location, location!)
But then the governments of these high tax places have all this money coming in: they're not going to give it back, in fact, they're going to use it to entrench themselves in power forever by buying votes with any and all welfare programs under the sun. And so, almost literally sunshine makes government grow. And the system feeds on itself: people now want to go to these places because of the freebies, so they can keep taxing and buying votes. Except eventually you get somewhat of an Atlas Shrugged strike - except instead of moving to a gulch people move to other states or even countries. And the paying base dries up but the demand for goodies remains, explaining California's inability to pay its bills. Part of that is the stupidity of allowing governments to make promises beyond the ends of their terms, of course - they don't care, they'll be retired by then.
What the nanny-staters like to do then is federalize the problem. Much like it might not have been profitable for individual business owners to be racist and not do business with blacks back in the day - they would have lost a large amount of custom (although blacks may have generally been poor, stack enough of them together and you're talking a lot of money) - they would have lost to those without such policies - but if the town, county, or state forces everyone to segregate, or to not serve blacks, then the cost is socialized and racism becomes reasonably profitable. Similarly, if nanny states can push programs to the federal level, they force everyone to take the penalty of the tax (but also let state legislators and others have the vote-buying power of the welfare, which they like), so that moving to another state is no longer an option to avoid particular taxes and welfare. They are surely working to internationalize these programs so that one can't even escape with overseas operations.
