Monday, December 14, 2020

Revenue sharing in progress

 Fact check: Mitch McConnell says Democrats want to create a ‘slush fund’ for Gavin Newsom

Propose more for the senate. haggle it, just make sure the result is cash, as in 'slush fund'. It is slush fund to the governors because of states rights. My question? How much does Vermont get?  

Vermont gets one state share plus one fifth of the district share, by given coin weights. A billion to Vermont is good enough. We sort of tune this to the tails on the distribution. A fair split by district gives Vermont about a third of a billion, assuming 160 billion. A fair share by state is about three billion. 

There are a batch of states, about 8 with seven to nine districts that scale effectively. But 13 states will definitely vote for a greater state share, as they should. About six states are big enough to really push the opposite.  But the easy limit here for the big states is to just pay off the smaller with small change, about ten billion triples their share. So in the 150 billion just prepare to give double odds for the small states, let Vermont have their billion.

The boundary condition on Vermont means large states lose about 10% of the fair share. The positive cost is because states never change boundaries. The Kelly bet ultimately dumps on Treasury and the double spend.  If a brand new programs come into law, then Treasury must make the bet on how o allocated double spending, after the revenue sharing.

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