New Fox News ANALYSIS: States Hit Hardest by Recession Get Least Stimulus Money

My newest piece at Fox News starts this way:

The stimulus bill "includes help for those hardest hit by our economic crisis," President Obama promised when he signed the bill into law on Feb. 17. "As a whole, this plan will help poor and working Americans."

But FOXNews.com has analyzed data tracking how the stimulus money is being given out across the 50 states and the District of Columbia, and it has found a perverse pattern: the states hardest hit by the recession received the least money. States with higher bankruptcy, foreclosure and unemployment rates got less money. And higher income states received more.

The transfers to the states having the least problems are large. Even after accounting for other factors, each $1,000 in a state's per capita income means that the state got $21 more per capita in stimulus funds. With a spread of almost $38,000 in per-person income between the top and bottom states, this has a sizable impact. High-income states get considerably more stimulus money.

States with higher bankruptcy rates got a lot less, not more, money — roughly $86 less per person for each percentage point increase in the state's bankruptcy rate. States with higher foreclosure rates were treated very similarly, losing $82 per person for each one percentage point more of the people suffering foreclosures. . . .

For those interested, here is the most basic regression result.

King Banian points to this earlier piece by Gavin Wright that finds that the New Deal spending was also related to maximizing political support.

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Blogger Lazy Bike Commuter said...

I don't know if you've heard about it, but in Ohio we tend to be pretty mad because GA seems to have used federal stimulus dollars to lure NCR Corporation there--they
"created" jobs by firing a bunch of people in Dayton and hiring a bunch of people in Savannah.

7/20/2009 9:27 AM  
Blogger Pauli said...

Yes, but my guess is that GA has lower state taxes than our wonderful Buckeye state.

7/20/2009 2:29 PM  
Blogger King said...

John, a good start, but I think you need to firm up the econometrics in here. I've posted some ideas:


7/20/2009 3:13 PM  

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