Sunday, December 6, 2020

Small states and revenue sharing

 They always want it increased in total, they win either way.  

Large states want the amount as low as possible until the recession, then they want it flipped and increased. Whether the amount is low or small, the cost of subsidizing small states is still trivial to large states, but always positive.

In the emergencies the system always flips to districts to get maximal spread. But relative to the emergencies, the small states do not lose out, as they suffer in proportion to density.  The margin will always be in the middle, the 5/1 states. 

The aggregate minimizing cost of constitutional imbalance is something like 5/1, and that is the long term equilibrium. States like California motivated to subdivide. Small states will be attracting populations up to two or three districts, except maybe Alaska. Alaska is a permanent subsidy.

All about pricing congestion. Markets are structured queues. That is why they gave out Nobels. This is understanding congestion and using auction structure to provide liquidity and scale in the market.

It is not just telecommunication, it is the Congressional market, the Treasury - Fiat market. it is knowing how value nets are sustained. But is it loss avoidance, this is not yield hunting, this is avoiding the wait in line.

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