And that's your basic mistake. Federal payments are part of federal programs, not subsidies to states. They would be (and are) paid anywhere. From the link:
Why money comes back to your state is a little more complicated. Pew has helpfully broken down federal transfers into five categories:
- Retirement benefits
- Non-retirement benefits
- Grants (mostly transportation, education, housing and Medicaid)
- Government contracts for goods and services
- Salaries and wages
Most of the transfers do not come from “red state welfare” like agricultural subsidies. They derive from Social Security, Medicare, Medicaid, unemployment insurance, food stamps, welfare, the maintenance of the national highway system, the purchase of goods and services for the federal government, and the operation of federal facilities and lands.
Nope.. they are subsidies for the state. They pay for things that OTHERWISE THE STATE WOULD HAVE TO PAY FOR.
For example. Without Medicaid.. the state would have to pay for millions of its citizens to have healthcare. Unless the state decided that they would just go without and let millions of their citizens go without healthcare. But states don't.. they CHOOSE to accept those payments.
Without medicare.. the state would have to cover its old people.. or just let them go without
Without welfare... the same
Without national highways.. the state would have to fund those projects.. or go without the economic benefit of those roads.
now you say:
But but but: They would be paid anywhere...
True. That's irrelevant.
Whats relevant is how much is paid out to the federal government versus paid by the federal government to the states.
States that pay the federal government more money than they get back... are therefore subsidizing those states that get more from the federal government than they pay in.
To simplify it for you..
Lets take social security. I will in all likelihood get social security. (okay.. lets hope). But, its guaranteed now that unless they dramatically increase the maximum I can get from social security, I will have paid millions more into social security than I will every get out. From my personal taxes... to all the money my company pays into social security for each employee.
So.. the amount of money that I have put into social security.. very much subsidizes everyone who ends up getting more out of social security than they put in. You simply cannot argue that I am not subsidizing those that get more than they put in. Despite the fact that I also "get social security".
So to.. a state that gives more to the federal money than they get back.. are subsidizing those states that get more money from the federal government than they give.