What you're pointing out is precisely what Europe doesn't do. Things would be fine in Europe if Germany subsidized Greece in the way that Massachusetts subsidizes Alabama.

The headline seems somewhat misleading.

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Anyway, it's the system of intra-state transfers that makes the United States a functioning union, and it's the reason that we're not like the Eurozone.

The US states and the various Eurozone countries are actually similar in that they can't print their own money, and have to strive to balance their books, and if they don't, markets may lose confidence in them. But the difference is that the rich states are permanently bailing out the poor states, a mechanism which doesn't exist formally in Europe (it exists on an ad hoc basis).

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In Europe, you have rich, high-productivity states like Germany demanding that the poor, low-productivity states cut their government budgets if they want bailout money. And although the economic don't work, the sentiment is logical, especially if you're a German politician that has to explain to voters why their tax dollars are going to a different country.

But in the US it's totally different. It's the moocher states (the Greece-like states that are poor and rely on handouts) imposing austerity on everyone. Imagine if Greece were to try to dictate what kind of economic policy Germany could use to stimulate its economy. That's what's happening in the US.

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IOW

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