Have you ever been to rural Mississippi or West Virginia?
I have, and I've also been to rural areas of the "second class" countries of EU, like Greece and Romania (not to mention pending member states like Bosnia). And it's actually striking how similar they are in terms of economic development. Granted, I still saw some livestock plowing in Romania-not a common sight in the US-but otherwise the poorer states of the US and the poorer nations of the EU are pretty on par. Particularly with respect to dwellings and the frequent lack of many of the accoutrements of what we consider "modern life" (Internet, computers, smart phones).
I'd say the urban areas of the poorer US states are slightly more developed than their counterparts in Romania and Greece, but the rural areas are pretty much on par.
And btw, the governments of those poorer US states are typically fairly cash poor and often indebted, because they have very poor tax bases.
And in terms of government corruption, the two are absolutely on par, I'd say.
There are certainly many poor rural people in the US who get screwed over by the society at large, just like there are many poor urban people who get screwed over by society, but that’s a different set of problems that federal transfers to keep states afloat doesn’t necessarily fix.
(I agree though that it would be nice if we in the US had a more effective set of social support systems to help individual struggling families. It would also be nice if we had stronger labor protections, a higher federal minimum wage, etc.)
You have seriously misunderstood the situations that you've seen. Yes there are poor people in Mississippi. No they do not live like poor people in Romania. They are probably similar in a way that looms large for you, in that they make different choices about their lives than you would make for them. An American who doesn't have a smartphone doesn't want one, which is a perfectly valid choice. [0] The use of animal traction in agriculture is also a valid choice, but one would be wrong to assume that the Amish are poor. It's especially problematic for "yuppies in McMansions" to attempt to universalize their idiosyncratic tastes in housing. Most of humanity does just fine without a giant pile of pine sticks and drywall.
[0] https://www.fcc.gov/consumers/guides/lifeline-affordable-tel...
Germany consistently operated at a net deficit of 6-8 B euro/year in terms of EU fees vs EU investment in Germany.
That same wealth transfer is taking place in the EU as well. Not on the same scale possibly, but it certainly takes place.
Greece's 6B net gain in 2008 makes up 1/9th of their total welfare spend in 2009 for instance (56B).
http://ec.europa.eu/budget/financialreport/2014/annex/3/inde...
https://stats.oecd.org/Index.aspx?DataSetCode=SOCX_AGG
I agree that it was not a good move to join the currency union for Greece. That was a bad choice by Greece, and a greedy move to manage finances short term with artificially cheap borrowing.
In poorer US states, about 10% of gross state product is collected as federal taxes, whereas something like 20–30% of gross state product comes to those states through various federal spending.
Moreover, lots of Greek debt (IIRC) was originally to banks which had lent lots of money without oversight; almost knowing that someone (the EU states) would take over the debt if need be... Of course Greece had borrowed recklessly on their end as well.
But I think the analogy and contrast to how US states work is really good. Want a single currency across multiple areas with differing economic performance? OK, but then better have mechanisms for supporting equal footing.
If you sign a legally binding document that you will repay a loan, plus interest, or your assets are on the line, what "oversight" do you need? Wouldn't the world be a better place if people paid money back as contracted, rather than ripping off (and somehow blaming) the lender? If you don't like the terms, don't accept them. "But we need money!" isn't an excuse.
If everyone repaid debts, then lending money wouldn't require interest. Interest expresses the danger that money may not be repaid as, for example, during bankruptcy proceedings.
Debt forgiveness has existed since the dawn of money. See [1] for more information.
[1] http://www.amazon.com/Debt-The-First-000-Years/dp/1612191290
On the other hand, where would we have been without the euro? Would it have been any better? I am not so sure.
And in the EU the richer states do support the poorer ones, but since long especially the UK opposes this. They don't see the benefit. I think it's well worth the money, even with the Greek. We cannot abandon them, and it would be a major political stupidity to do so, with Turkey and Russia going the wrong way. I think - in the end - all political leaders of importance will agree with this.
In Greece, the problem is corruption. It will be an uggly fight to turn this around. I hope this is that fight, because otherwise it's all for nothing, or it's only for the EU. I sincerely hope they can get rid of corruption, because it will make their life in the end a lot better. For now it's lots of misery though.
The weaker states in Europe should have never agreed to a currency union without any kind of fiscal or political union. It led to a massive bubble of stupidly cheap debt and speculative capital inflow, and then when the economy started looking iffy all the money flowed out again, and poof.
Losing control of your monetary policy is straightjacket enough when your economy dips, but under the rules of their debt deals, Greece also lost control over fiscal policy, and was forced to apply pro-cyclical cuts to government spending. They ended up in worse-than-great-depression level economic collapse, with absolutely no tools available to deal with it.
For Germany by contrast, the Euro has been great (though fiscal austerity in response to a recession was stupid for them too). Their currency has been artificially weak relative to their neighbors, helping them run huge trade surpluses.