We have often discussed the real possibility that a major U.S. city or state will quite shortly enter the realm of financial bankruptcy. Falling tax revenue, excessive taxation, high crime, out migration of residents and businesses, and other negative factors will eventually result in a city or state defaulting on its financial obligations.
States that we believe are most likely to go bankrupt include Illinois, New York, New Jersey, and California. The leading bankruptcy candidate seems to change month to month as each state’s political class continue to show no idea how to fix the chronic problems that they usually caused.
But it doesn't have to be that way. There actually are politicians around the country that understand what it takes to keep residents safe and happy and ably manage the state’s fiscal affairs\. The Wall Street Journal recently ran a few statistics that compared life In California, a leading bankruptcy candidate, and Florida, a state that has been enjoying a golden time:
California has lost a net 1.8 million residents over the past decade while Florida has gained 2 million residents over the past decade.
According to the IRS, California has lost $73 billion in income from 2015 to 2021 while Florida gained $129 billion during that time period as a result of migration trends and reality.
Over the past two years California has averaged 2 percentage points higher in their unemployment rate than Florida.
The number of homeless people in California in 2022 was 170,000 while Florida had fewer than 30,000 homeless people, about 809% fewer.
California’s state and local government spending was $14,755 per person in 2021 vs. only $8,816 in Florida and yet, despite more government spending per resident, 1.8 million people have left California in the past ten years while 2 million have gone to Florida.
California gas prices average about $2 more a gallon than Florida but Florida has better air quality than California.
In the latest “Rich States, Poor States” analysis by the American Legislative Exchange Council, California ranks 45th while Florida ranks 9th, beating out California along every socioeconomic measure in the study.
Other data not from the Wall Street article includes the following:
California’s unemployment rate a couple of months ago was 4.6% while Florida’s was 2.7%.
California’s annual economic growth rate a couple of months ago was .4% while Florida’s was 4.0%.
From a migration perspective, 48% of California’s migration was inbound while 52% was outbound (i.e. more people were leaving vs. coming into California) while Florida’s migration was 55% inbound vs. 45% outbound.
[Side note: New Jersey’s out migration is about 67%, i.e. for every person moving into the state two are moving out, not a healthy long term trend and a good reason why New Jersey is another prime candidate for bankruptcy].
The California violent crime rate per 100,000 residents is currently running at 4,720 while the Florida violent crime rate per 100,000 is currently running at 3,922, 17% lower than the California crime rate.
California will likely have a budget deficit of about $68 billion in fiscal 2024, requiring state government cutbacks in spending while Florida will likely continue to have budget surplus results.
California has already defaulted on a Federal loan while Florida has not defaulted on any of its Federal government obligations.
The bottom line is that California’s politicians have no idea what they are doing. They rule over one of the most beautiful states in the union, a state with world class beaches, mountains, rivers, and forests. They are home to three major tax revenue producing industries: tourism, Silicon Valley, and Hollywood. They have the largest population of any state and have more people than many countries. They have large urban areas, large farm areas, and large wildlife areas.
They have everything going for it and yet, the state politicians have managed to make it a mess: high taxes, high crime, high homelessness rates, massive high government regulation burdens, the list goes on and on. Even if California does not go bankrupt first, what it's politicians have squandered, given the state’s natural assets, is atrocious and a shame. It does not have to be this way as Florida shows.
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If you agree that we need to deseat every member of Congress for their lack of success and accomplishment, then please consider going to the following petition link to help the cause:
https://www.change.org/p/deseat-congress-reset-freedom
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