Nicole provides a very insightful explanation of the situation in the Euro zone, as usual. Another thing that makes the U.S. different from Europe is a standardized tax system. Residents of New York and Mississippi face the same tax rates on income. So while one state may or may not be paying in a share equal to what it receives, all know that the others are at least playing by the same rules. Germany has a different tax structure than Greece. So if Greeks choose to tax themselves at a lower (de facto) rate than Germans, they should expect Germans to resist transfers to cover deficits caused by Greeks’ refusal to appropriately tax themselves for the public goods they consume.