I'M NOT quite sure how Chris Christie and Rand Paul imagine that insulting each others' states will smooth their respective paths to the Republican presidential nomination in 2016, but it certainly makes interesting political theatre. The hostilities originated in Mr Christie's attacks on Mr Paul's libertarian stance on surveillance and defence issues, but much like the first world war they are now spreading into unexpected theatres of combat. Mr Paul seems to have opened the state-on-state smack talk by accusing New Jersey of having a "gimme gimme gimme" attitude on federal emergency aid related to Hurricane Sandy. Mr Christie responded that Mr Paul is the one guilty of "pork barrel spending": "New Jersey is a donor state and we get 61 cents back on every dollar we send to Washington. Interestingly, Kentucky gets $1.51 on every dollar they send to Washington." Mr Paul defended himself by arguing that the reason for Kentucky's disproportionate reception of federal dollars is the large military presence in the state: "What does he want to do, shut down military bases in Kentucky?" Those paying attention will note that while this debate started with Mr Christie slamming Mr Paul for weakness on defence, at this point it is Mr Paul, the libertarian nominally committed to reducing defence spending, who is implying that defence spending should be off-limits for budget cutters. More basic, though, is the question of whether Mr Paul is correct about the source of Kentucky's outsized take of the federal budget. The argument that it is actually rural and Republican-leaning states who benefit disproportionately from federal spending is a familiar one from Democrats, and if Mr Christie had been arguing with a politician representing most any other GOP-friendly state, he wouldn't have had to worry about the military-bases comeback. But interestingly, in this particular case, Mr Paul is pretty much right: the number one reason why Kentucky gets so much more back from Washington than it contributes is that Kentucky is among the top state recipients of Pentagon spending.

In 2009, for example, Kentucky received a total of $12.3 billion in defence spending, $5.7 billion of it payroll and the rest contract awards and grants. In that year New Jersey got $11 billion (just $2.7 billion on payroll), while its population is just over twice the size of Kentucky's (4.38m v 8.87m). Per person, the Pentagon spends more than twice as much in Kentucky as it does in New Jersey.

But while defence spending is the biggest single component of the difference between federal spending on Kentucky and New Jersey, it's not the only one. According to the Social Security administration, 8.1% of Kentucky residents aged 18 to 64 were on federal disability payments at the end of 2011, the highest rate of any state but Arkansas (8.2%). In New Jersey the rate was 3.8%. As a result Kentucky's monthly Social Security disability spending came to $242.4m, almost as high as New Jersey's $259.9m even though, again, Kentucky's population is a bit under half the size of New Jersey's. Annualised, that would have meant Kentucky received $2.9 billion in federal disability payments, while New Jersey, a state twice its size, got $3.1 billion. It's not quite clear why so many Kentuckians are on disability, but it's not because of black-lung disease among coal miners: the breakdown of claimants' profiles is about the same as in most other states, with the largest single category, about 35%, being mental disorders.

Health spending also contributes to the disparity. For example, Medicaid spent $5.2 billion on Kentucky residents in 2009, and $8.4 billion in New Jersey. Per capita, that works out to $1,208 in Kentucky and $959 in New Jersey. This isn't surprising, since 18% of Kentuckians are covered by Medicaid, compared to just 12% of New Jerseyans. And that's despite the fact that Medicaid in Kentucky only covers workers earning less than 60% of the federal poverty line, while in New Jersey it covers workers earning up to 200% of the poverty line.

Infrastructure spending plays a role as well. Federal highway spending on Kentucky was $747m in 2009; in New Jersey, with a population twice Kentucky's size, it was $1.06 billion. Another way to measure the disparity is in terms of how much states pay into the highway construction fund through road and petrol fees, versus how much they take out. But here, too, Kentucky's ratio was worse than New Jersey's: Kentucky received $1.41 for each dollar it paid into the fund, while New Jersey received $1.22.

Finally, a major reason why New Jersey is a net tax donor while Kentucky is a net tax donee is that New Jersey is much richer than Kentucky. Median household income in New Jersey from 2007 to 2011 was $71,000; in Kentucky, it was $42,000. New Jerseyans pay more into the federal coffers because they earn more. And that's where the relationship between New Jersey and Kentucky is more similar to those between other rich, Democratic-leaning states and poor, Republican-leaning states. What this all boils down to, in other words, is that wealthy states in America pay more in federal taxes than they receive in federal spending, while poor ones receive more than they pay. And that's a good thing! We should be celebrating the fact that America redistributes wealth from rich regions to poor ones. This is precisely what Europe is failing to do these days, and it's tearing the continent apart. If people in New Jersey start refusing to allow their taxes to go to fund infrastructure, welfare or military spending in Kentucky, we'll wind up like the euro zone: a discombobulated, cyclically vulnerable, recession-prone monetary union that lacks a common economy because it lacks a common sense of purpose and nationhood. Both Rand Paul and Chris Christie should quit dissing each other over their states' mutually beneficial participation in unified American national governance. The fact that New Jersey pays plenty of taxes and gets federal disaster relief, and that Kentucky pays less in taxes and gets lots of military spending and disability payments, is what makes America strong.

(Photo credit: AFP)