It is the beginning of another month which means it is time again to review the latest political class insanity from the American political class. Each month it takes us multiple posts to cover the wasteful spending, incompetent government organizations and employees, government programs that usually make a problem worse than resolving it, inane and idiotic politician comments, etc.
To review past posts on this insanity and idiocy, just click on the first few posts in each month listed to the right of this page. After reviewing just a handful of these insanity posts we think you will agree that we are currently being served by the worst set of American politicians ever to hold office in our entire history.
1)We have often discussed the concept of the “financial death spiral” as it relates to state governments across the country. The spiral unfolds as follows:
The state’s politicians spend much more money than they take in via taxation.
Thus, rather than reduce government spending and waste, those politicians decide to raise taxes and make their state residents and businesses poorer in the process.
As a result, some residents and businesses leave so that they will be able keep more of their hard earned income.
This reduces the tax base and the tax revenue the state government collects.
Rather than reduce government spending, the state politicians cut services to residents and businesses AND raise taxes.
This causes more residents and businesses to flee the state which reduces the tax base which results in lower tax revenue and the spiral is underway.
People basically want to be as free as possible in their lives and that includes keeping as much as their wealth as possible to spend anyway they see fit for themselves and their families. Eventually, we have predicted, a state government will have to declare bankruptcy as their debt and spending eventually drives off enough tax revenue producers and their financial viability collapses. Seems they never significantly reduce government spending, it is almost always more taxes will fix everything.
Our analyses from several different angles always shows that the following states are the most likely to go bankrupt first:
Illinois
New Jersey
New York
California
Our current bet is that Illinois will go bankrupt first but the other three are also strong candidates.
Has anything changed since our last analysis? We do not think so since the latest “Annual Movers Study” has been published. This annual study documents moving patterns of residents' across the country, i.e. are more people moving out of a state or moving into a state. If those moving out are significantly higher than the number of people moving in then the reduction in the tax base and the death spiral is likely underway.
So what states are hemorrhaging residents at the fastest:
New Jersey - New Jersey is the leading state in losing residents since last year 68.5% of the state’s movers were outbound while only 31.5% were inbound. This is not surprising since New Jersey has been in the top ten of losing residents for the past ten years.
Illinois was second relative to residents fleeing with 33.5% of the movers being inbound into the state which was about half of the outbound rate, 66.5%.
New York - New York held down the third spot with a 36.9% inbound rate and a 63.1% outbound rate.
Connecticut - Connecticut was in fourth place with a 37% inbound rate and a 63% outbound rate.
California comes in sixth in this list with 43.1% inbound and 56.9% outbound.
The states listed above are known to have some of the highest taxation rates in the country: high property taxes, high income taxes, high gas and utility taxes, taxation on retirement accounts, etc. Thus, it is not a surprise why so many more people are leaving vs. coming into these states. In addition, as tax revenue dries up, government services are cut including law enforcement which has resulted in spiking crime rates in the above states.
The politicians in these states just do not get it: higher and higher taxes drive out productive, tax paying residents and businesses to the long term detriment of the state government’s financial viability.
A state government cannot stay viable forever if for every new resident, two existing residents exit the state. The financial death spiral has to eventually kick in as the tax base shrinks.
2)While the above study looks at total movers, U-Haul also does an annual study of people using their services who are moving into and out of states. Their analysis found that:
California just led the nation again, for the third year in a row, for most outbound moves relative to inbound moves based on U-Haul moving vehicle rental data.
According to the Santa-Barbara News Press, “U-Haul saw the highest demand for one-way equipment from California outbound residents, and saw the highest net loss of one-way U-Haul trucks from the Golden State” as residents fled like bats out of hell to escape the blue state’s socialist utopia of homeless shantytowns and toxic algae blooms. The report also notes that the state has seen a 12% uptick in the number of people getting the heck out of dodge, noting that “343,230 more Americans moved out of California compared to those who moved into it” and marking the third year in a row that the state has hemorrhaged people leaving for greener pastures.”
The most popular places for Californians to move to are Texas and Florida, states with significantly lower income, gas, utility, and other taxes and lower crime rates.
And it is not only residents who are fleeing a deteriorating quality of life situation in the state, over 350 companies, both big and small, including such names as Tesla, State Farm Insurance, and Charles Schwab, have moved their headquarters and other facets of their businesses out of California.
Politicians do not get it: people want to be free of high taxes, high crime, and a lower and lower quality of life. The move numbers don't lie.
3)As we have discussed the following depressing stats many times:
There are about 500,000 to 600,000 homeless Americans living on the streets of this country.
There are millions of American families that are struggling to feed their families.
About 30 million Americans do not currently have health insurance coverage.
Tens of thousands of Americans are dying every year, and in increasing numbers, due to drug addiction.
Given the suffering of millions of Americans across the country, one would hope that the Washington political class would be laser focused on easing the crises facing many citizens.
But as we have pointed out many, many times, the Washington political class does not have the interests of Americans as their top priority:
The Biden administration is annually spending $324 million of taxpayer wealth to cover the healthcare of illegal immigrants that have flooded over the southern border and have been detained since when Biden was installed as President.
This was according to the Immigration and Customs Enforcement (ICE) year end report.
ICE will be spending the money “providing medical care, including mental health, to all detained” illegal immigrants.
This $324 million is expected to rise in the years going forward as Biden allows millions of illegal immigrants to continue to enter the country.
And this money is being spent just on those illegal immigrants being detained, it is estimated that at least $18 billion is spent every year on illegal immigrants that are in the country that are not currently being detained.
$18 billion could feed a lot of hungry Americans. $18 billion could shelter a lot of homeless Americans. $18 billion could provide drug addiction treatment to a lot of drug addicted Americans. $18 billion could provide a lot of medical support for uninsured Americans.
But alas, forget Americans, let’s take care of millions of illegal immigrants that Biden has let into the country. Such a sad set of priorities by Washington career politicians.
That will do it for today: Washington could not care less about struggling Americans and state politicians are still too stupid to understand that continually raising taxes actually reduces the tax revenue for the state government which eventually turns into a financial death spiral. With over 300 million Americans in this country, one would think that we could elect smarter people than what we currently have in office. But somehow that never happens.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
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