[polishninja]

I agree. Without a fiscal union, you just have a fixed exchange rate. Look at the Euro for example. Since Greece and Germany make separate fiscal policies but have the same exchange rate (due to the Euro), if their labor force output (GDP) doesn't match then the real cost of the Euro goes up in the lower output country (Greece). They lose the ability to adjust policies based on their current economic situation.

Each separate state in the US has a fixed exchange rate with each other (1 USD = 1 USD), but our fiscal policy is administered by a central authority that adjusts for overall US conditions, not just individual states.