Many Americans believe that the states most clobbered by foreclosures, such as California, Florida, Nevada, got the biggest share of the billions in stimulus money given by the federal administration to rejuvenate state economies and contain foreclosures.But in reality, it is not so. According to a study conducted by Fox News on the distribution of federal money to all U.S. states, the states most battered by foreclosures, unemployment, bankruptcy and other effects of the recession got the lowest share. The study also found that states with higher income received got bigger allocations.States that have the lowest rates in foreclosures, bankruptcy and joblessness got $21 more in federal money per capita income. With highest-income states and lowest-income states having a difference of nearly $38,000 in individual income, the $21 difference is a huge difference.Additionally, states with higher rates of bankruptcy got less federal money compared to the higher-income states. These bankruptcy-laden states got approximately $85 less from the federal money per individual for every percentage point rise in the states’ bankruptcy rates.Similarly, states with higher foreclosure rates also received a lower share of the stimulus money. These states lost $82 per individual for every percentage point rise in foreclosures.Fox News said it studied data gathered by the Wall Street Journal on state spending on social and infrastructure spending and data collected by the administration’s recovery.gov web site.Out of the total stimulus money of $787 billion, $195 billion was allocated for infrastructure and social expenditures, with Florida getting the lowest share – only $504 per capita income – and Washington, D.C. getting the highest share -- $3,712 per capita income.Even if the analysts relied only on data available on recovery.gov, the conclusion would still be the same: much of the billions allocated to help states most battered by foreclosures have not been given to them.According to recovery.gov, the federal government has allocated $218 billion just to jump-start the national economy.Florida, as seen in many charts on foreclosures in 2008 and in first months of 2009, has been reeling from continued rise in foreclosures and joblessness and decline in home prices. Yet it received the least level of financial help.In response to the claims of Fox News, administration officials argued it was Congress that decided where the stimulus should go. Analysts say lawmakers and federal officials need to review their stimulus allocation policies so that more help goes to states reeling from the effects of foreclosures and the recession.
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Higher-income states got a bigger share of the federal stimulus money, according to a Fox News study. It also said that states hit with high rates of unemployment, forclosures and bankruptcies received the least share.
Joseph Smith has been educating buyers on the finer points of Foreclosures at Foreclosure-Support.com for over five years.
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