US Federal Spending: Who Benefits?

blog.civilchallenger.com ^ | 3/25/2009 | Civil Challenger

[CivilChallenger]

Almost everyone in the US seems to know that federal government spending is raging out of control. Last week I noticed not only that consumer spending has been mildly edging up, but I also noticed that it seemed to be up in areas around Washington DC, the epicenter of the federal spending spree. While I believed it was entirely due to the explosive increase in federal government spending rather than signs of economic health in the private sector I didn't quite have the evidence. After looking at BEA data, I now have even more evidence of that. The following chart has areas in blue that represent personal income gains, whereas the areas in brown represent areas of income loss:

I decided to crunch the BEA numbers to find in more detail how personal incomes changed based on the distance from Washington DC, the favorite city of the federal government. I was very surprised just how well the numbers line up. If I were to pull the numbers from my rear I certainly wouldn't have made it look so ridiculously smooth of a chart. The closer you are to Washington DC, the more increase (or lack of decrease) that you get in general. Here is the chart:

Hawaii was the only state in the furthest group from Washington DC to have a gain in income for 2009 according to the data source which is the US BEA. Meanwhile, six of the ten states closest to Washtingon DC registered personal income gains for 2009.

Source: blog.civilchallenger.com
Continued in comment section...

[CivilChallenger]

Method The method used was to group the states by distance from Washington DC. I created five groups arranged from closest to furthest from the capital. Income data was collected from the BEA... specifically the Q4 2008 with Q4 2009 personal income data grouped by state. Distance data was collected from Mapquest and sorted by travel time from Washington DC. Hawaii does not have a driving time except for transformer-class cars that convert into submarines or boats, so I simply put that in the last category since it is the furthest state by distance. I then determined the typical income change of the group for 2009 by first determining the average and median prices, then averaging them together into what I call the "Typical" income change.

What does this data mean? The data means that your income was more likely to edge up last year if you lived near Washington DC, and the further out you go, the more your income was likely to go down. This goes to show that the Washington DC crowd are yet again making off like bandits while the rest of us suffer.

The biggest supporters of a centralized government economy seem to be in California... perhaps they should be paying closer attention. What will happen if down the road if the "capital city of Earth" is clear on the other side of the globe?

Source
This is part of today's post at blog.civilchallenger.com which is re-posted as permission as a way to promote a brand new blog with lots of research but very little traffic yet.

[Attention Surplus Disorder]

“US Federal Spending: Who Benefits?”

Anybody who has the inside skinny to carve out their piece, big or small. Many times I regret that I’m simply not programmed that way.

[mlocher]

Thanks for the post. This is one of the best blogs I have visited in quite some time. The author is very methodical and thoughtful, with lots of great data.

I know that DC is not feeling the impacts of the recession -- it appears to be recession proof. The distance from DC to income loss ratio was brilliant, and it surprised me. On a different topic, the following caught my attention

First Solar yesterday announced that during the previous quarter it manufactured its panels at a cost of 98 cents per watt capacity. This is a very big deal because a rule of thumb is that coal power plants cost roughly $1 per watt capacity. So, it is looking very optimistic for solar power to become cost competitive without government subsidies.

I hope this holds true. The more reliable, cheap energy sources we have, the better. Green is OK with me as long as it is the cheapest energy on the open market.