November, 2019, Part 5, Political Class Insanity: The Tragedy Of The Minimum Wage, The Delusions Of California Politicians,and The Failure Of Common Core

It is another month which means it is again time to review the latest political class insanity from Washington and around the world. Political class insanity takes many forms including the wasting of taxpayer wealth, criminal fraud within government programs, inane and stupid political quotes and actions, the inability to create and implement effective and efficient government programs, stupid and ill performing economic policies and strategies, and other forms of insanity that continue to evolve and surprise and shock us.

Let’s get started:

1) We have often discussed the fallacy that raising the minimum wage rate results in better lives for those affected by that raise. Our latest expose’ was in the following post:

https://loathemygovernment.blogspot.com/2019/11/november-2019-part-3political-class.html

Donald J. Boudreaux, writing for the Mercatus Center on October 31, 2019, showed, again, how bad it can become when politicians do not know the consequences of raising the minimum wage too fast:

• He starts off by stating what we have always said: “Minimum-wage legislation artificially raises firms’ costs of employing low-skilled workers. In consequence, some workers who would have jobs in the absence of the minimum wage are cast by the minimum wage into the ranks of the unemployed.”
• In other words, the good news is that you got a pay raise. The bad news is that you no longer have a job.
• The majority of economic studies on the topic of politicians raising the minimum wage arbitrarily support the reality that for the most part, raising the minimum wage results in less economic prosperity, especially for those at the lower end of the wage scale.
• And that lessening of economic prosperity is not just the reduction in the number of jobs available or the number of hours available to work.
• Many times to make up for the increase in the wage expense line, in order to survive, employers reduce other expenses to stay in business.
• Depending on the industry, employees end losing fringe benefits that have economic value to both the employer and employee including free meals, free employer supplied uniforms, employee discounts, overtime work, company picnics, comfortable break rooms, employee recognition programs, reduction in leaving early or coming in late to work opportunities, Friday happy hours, etc.
• According to Mr. Boudreaux: “When government raises the minimum wage, employers can reduce the amount of nonwage benefits paid to employees. And so even workers who keep their jobs at the higher minimum wage might nevertheless be made worse off because of reductions in the value of their nonwage benefits.”
• Thus, to offset the arbitrary increase in wages from economically ignorant politicians, employers will make up to five business operations adjustments: employ fewer workers, reduce the number of workers’ hours, cut the value of workers’ fringe benefits, work employees harder or mechanize workers’ processes.

And yet, politicians continue to think they know best, i.e. raise the minimum wage, and they always ending hurting the ones they think they are helping, the low income workers in the economy.

2) We have recently discussed the reality that California Democrats/liberals/socialists have turned the state into a stinking (literally) mess:

• There is widespread homelessness across the state with almost 90,000 homeless Americans in just the two cities of Los Angeles and San Francisco.
• The large homeless population and resultant garbage issues in Los Angeles have led to the resurrection of the Medieval disease, typhus, and a real concern that the bubonic plague might be next.
• The pipe dream to build a high speed rail line the length of the state resulted in the wasting of untold millions of dollars before it failed miserably.
• The state is about $200 billion short of what it will need to pay future unfunded state government financial liabilities.
• Due to the state’s politicians allowing homeless folks to defecate and urinate in the streets of the state’s major cities without consequences, this has resulted in severe environmental crises as the cities power wash away the feces and urine into storm sewers which washes into rivers which is in turn used for irrigation.
• And finally, due to mismanagement of the state’s forests, the state is being ravaged by wildfires, killing people and destroying homes and businesses, wildfires that have caused utilities to intentionally cause blackouts to minimize the chance of wildfires.

Thus, it is pretty obvious that the state’s politicians, and the government bureaucracies it oversees and manages, is not only useless in California but actually dangerous. New diseases, wildfires, wasted taxpayer wealth, homelessness, they have failed at everything they have touched.

And yet the state’s politicians still do not get it:

• A lot of the wildfires in the state have been caused by sparking malfunctions of the Pacific Gas and Electric’s electric grid, sparks that have caused the wildfires.
• As a result, the state’s governor, said that changes have to be made, changes that may include having the state government take over the utility.
• Governor Gavin Newsom said the objective goal of any changes was to transform, Pacific Gas & Electric, into “one that better reflects our California values and will advance massive safety transformations beginning before next fire season.”
• Newsom has appointed an energy czar to figure out what to do including taking over the utility.
• Given the inability of the state’s politicians to get anything right, as illustrated by the list of failures above, does anyone really think that the state government and the politicians who operate it could efficiently, effectively, and safely operate an electric utility? Keep in mind that Pacific Gas and Electric is a regulated utility which means that the state government has always had oversight of the utility’s operation. 

And thus, the state, and indirectly the state’s politicians, have been a major factor in the failure of the utility to modernize and minimize wildfires. Yet, the governor thinks that he and the state government can get the job done. 

He and the state’s politicians have resurrected extinct diseases, have not resolved any aspect of the homeless problem and could not build a single track railroad system and yet then think they can operate a utility: State government representative Ro Khanna recently said in an interview that the state should nonetheless consider a takeover. “This is a case where public ownership would be much better.” Much better than what? Talk about being disillusioned and insane.

3) Common Core was a major Federal government undertaking that was supposed to make the U.S. public education system one of the best in the world. It is certainly not close to that today. Our kids usually do miserable on standardized tests when measured against kids around the world despite us spending so much more on education than other countries.

We have shown over the years what a failure Common Core has been when deployed around the country:

• Within a year or so of deployment in Maryland, the test scores of kids in every county plummeted rather than get better.
• Prior to being deployed in the state of Massachusetts, the schools in that state were ranked the best in the nation when it came to educating its kids.
• However, once Common Core was deployed it dropped to seventh best in a very short timeframe.
• Damning evidence that this approach to education was a failure despite spending billions and billions of dollars on it. 

And the latest results do nothing to disprove this failure:

• According to a recent article on the Western Journal website, the latest national standardized test scores were only marginally better than the results in 1992, 27 years ago despite spending untold billions and billions of dollars to improve those results.
• Math test results were trending upwards nicely until 2015 when that upward trend stopped suddenly.
• Not coincidentally, 2015 was about when Common Core was quite well established in our public schools.
• Results actually started going negative with fourth graders latest standardized test scores, just a little above previous scores.
• Eighth grade math scores were actually below where their scores were two years ago.

So, the Federal government, the bureaucrats that operate it, and the politicians that fund it and oversee it have been a complete failure when it comes to public education for at least the past 27 years. Common Core made our education processes worse, not better. We spent billions and billions of dollars to achieve this result. In the bigger picture, over the past three decades I would venture a guess that have spent trillion(s) of dollars to maintain a mediocre education system in this country. Insanity.

Okay, we learned today that: politicians continue to be ignorant when it comes to raising the minimum wage and the negative impacts it has on lower earning American workers, politicians continue to be arrogant, thinking they can run a utility company when the have proven they cannot operate anything else effectively or efficiently, and politicians continue to prove they have no idea how to improve education despite having and spending trillions of dollars to do so.

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:

https://www.amazon.com/Walter-Bruno-Korschek/e/B002KYU08Q/ref=dbs_a_mng_rwt_scns_share

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

November, 2018, Part 2, The Unfolding Disaster That Is Obama Care:Why Medicare For All Stinks and Why Trump Has Made Healthcare Better

Every month for years now we have had to discuss how bad Obama Care is turning out to be under the continuing theme, “the unfolding disaster that is Obama Care.” This month is no different. As the legislation continues to march through America, driving up health care and health insurance prices as it serves as dead weight on economic growth, it cements its rightful place as the worst piece of legislation Washington has ever produced.

It never had a chance to be successful since it really never addressed the underlying root causes of our ever increasing health costs in the country:

• Americans eat too much of the wrong kind of food, resulting in obscenely high obesity rates for the country.
• Our food chain is infested with overdoses of high fructose corn syrup, salt, sugar, and other unhealthy additives.
• Americans smoke too much.
• Americans do not exercise enough.
• The country is in serious need of health care tort reform.
• Barriers to insurance company competition across state lines need to come down.
• Obama Care never “followed the money” to find out who is actually profiting from the ever escalating healthcare costs in this country and how to get those factors under control.
• Obama Care never got the immense amount of fraud and abuse in current government healthcare programs, Medicare and Medicaid, under control in order to save money to efficiently fund other government health care initiatives.
• Obama Care never put serious research money towards curing the major diseases that drive high healthcare costs such as high frequency cancers and dementia type diseases.

You cannot resolve any problem unless you understand and address the underlying root causes. No difference here: Obama Care legislation never addressed these listed root causes and thus, has no chance of ever being successful.

But it is not just missing the root causes of our healthcare costs that makes Obama Care so horrible. It resulted in millions of Americans losing access to their favored doctors, hospitals, and insurance policies. It has caused insurance premiums, deductibles and copays to escalate substantially. It will likely add trillions of dollars to the national debt. It has exposed millions of Americans to higher than necessary identity theft chances. It has created government bureaucracies that are wastefully spending taxpayer wealth and being exploited by criminal elements. It has stifled economic growth and job creation.

These are just a sample of the types of idiocy that we have been reviewing for the past several years in this blog relative to Obama Care. To read those past posts, just enter the phrase, “the unfolding disaster,” in the search box above.

1) We have often reviewed how horribly the Federal government’s track record has been when providing healthcare to the American public:

• Medicare is going bankrupt with tens of trillions of dollars in predicted unfunded liabilities.
• Medicare and Medicaid lose tens of billions of dollars every year to incompetence and criminal fraud.
• The Veterans Administration has been so inept that thousands of veterans have had to wait months just to get an appointment to see a doctor with untold numbers dying before they could actually get a doctor’s appointment.
• Obama Care never came close to attaining its stated goals along every financial, medical and health insurance perspective.

And yet, despite this horrid track record in the healthcare industry, many Washington politicians think it would be a good idea for the Federal government to control EVERY aspect of Americans’ health care needs. They even have a name for this travesty, “Medicare For All.” 

Jack Crowe, writing for the National Review website, described how idiotic this concept is,besides the track record of failure in this area in the past:

• A viable estimate of the cost of “Medicare for All” concludes that the concept would cost the Federal government, and American taxpayer, $32.6 TRILLION over just the first ten years.
• This is the estimate that as developed by a forecasting model developed by the Mercatus Center at George Mason University.
• This estimate is in line with another study that was done independently by the liberal Urban Institute.
• This average cost of $3.26 TRILLION a year is almost equal to the total amount of record setting Federal tax revenue collected in 2017, i.e. the country would have to double the amount of wealth going to the Federal government every year to pay for this program.
• This $3.26 TRILLION a year, if paid in taxes, is wealth that could not be used to support and grow the economy, depressing economic growth and the financial well being of the country with no guarantee the Federal government could even execute such a big effort in light of its failures listed above.
• In fact, the study found that “the government could double all corporate and individual income taxes and it would still lack requisite revenue to fund the program.”
• Specifically, “Enacting something like ‘Medicare for all’ would be a transformative change in the size of the federal government,” said Charles Blahous, the study’s author.
• Bernie Sanders, rather than read and criticize the study based on its merits, decided to attack the study’s credibility solely based on the reality that his political enemies, the Koch brothers, fund some of the activities of the Mercatus Center:“If every major country on earth can guarantee health care to all, and achieve better health outcomes, while spending substantially less per capita than we do, it is absurd for anyone to suggest that the United States cannot do the same.” 
• This is a totally self serving and incorrect statement since in our previous post we showed that single payer systems like “Medicare for All” has not delivered what Sanders claim they have.

As we have said before, any single payer health care system is a stupid idea that refuses to die, similar to just about every other idea or program that Washington politicians all too often come up with.

2) Trump has made some pretty substantial changes to Obama Care’s tenets and rules and, of course, liberals and Democrats have cried disaster all along the process, claiming that Trump is heartless and causing health care suffering among Americans. But according to reality as described by Warren Todd Huston in a November 6, 2018 article for the Godfather Politics website, Trump’s changes have actually made health care better for millions of Americans:

• Mr. Huston cites an article in the New York Post by Mary Vought that showed that Trump has made life easier for Americans who are chronically ill and others with pre-existing conditions.
• Trump has encouraged the Food and Drug Administration to speed up the approval of generic drugs which generally cost less than equivalent brand name drugs.
• In Trump’s first two years the FDA has approved over 1,900 generic drugs while only 1,143 were approved in the last two years of the Obama administration.
• An analysis by the Council of Economic Advisors found that drug price growth over the past two years probably saved consumers about $26 billion.
• Trump also signed the “Right To Try” legislation that allows terminally ill patients to try experimental drugs as a last ditch effort to save their lives.
• Also, according to the article: “The Trump administration has expanded access to more coverage options — not fewer as Obamacare did...To individuals who can’t afford pricey ObamaCare plans, changes to short-term, limited-duration insurance will give alternatives with more reasonable rates — and a guarantee that they can maintain their coverage should they develop a costly illness that requires treatment after their plans’ expiration date.”
• Trump also eased Medicaid rules to allow states to better their Medicaid rules to more efficiently handle the needy in their states since according to Ms. Vought, “Disability groups aligned with Democrats didn’t mention it at the time, but ObamaCare effectively created a two-tier Medicaid system — with individuals with disabilities and other vulnerable populations at the back of the line. Under the Affordable Care Act, states get 90 cents from Washington for every dollar they spend covering able-bodied adults, but only 50 to 75 cents for covering individuals with disabilities. That has led states that expanded Medicaid under ObamaCare to treat people with disabilities as lower priorities.”

So, Trump’s Obama Care’s changes made drugs less expensive, gave no hope to the really sick Americans in this country, made it easier to get insurance policies that fit a person’s needs, and made it easier for the truly needy to get Medicaid help for their health needs. Yeah, he really screwed things up [sarcasm.]

More unfolding disasters of Obama Care next month are highly likely since Obama Care is the law that keeps on giving...bad news.

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:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

August, 2018, Part 3, By The Numbers - The Implosion of Social Security and Medicare and The Numerical Stupidity of "Medicare For All"

On a semi-regular basis we do a post under the theme, “By The Numbers.” Under this theme we analysis the crazy ways that politicians use numbers, from making them up outright, to using them inappropriately, to using them to lie to us. The problem for them when they do that is it is so easy to show how either stupid they are or how conniving they are.

As an FYI, as you read my analysis of the misuse of numbers, keep in mind that I have a masters degree in statistics and for most of my life have been involved in analyzing numbers and stats. Politicians misuse of numbers and statistics is taken as a personal and professional affront to me and my profession.

1) We have often discussed the serious and dire straits that Social Security and Medicare are in. The numbers are not good as more and more Americans retire and burden the systems with fewer and fewer workers to finance the needs of Baby Boomers' income and retirement needs. And as always, American politicians have neither the brains, will power or courage to fix what ails both systems.
A recent article in USA Today highlighted how bad the numbers are:

• The Social Security Trust fund will go broke in 2034 and Medicare’s trust fund will go broke in 2026, eight short years from now.
• But we know from previous discussion that this is fake news since the trust fund really does not exist as anything but a cruel accounting trick, Social Security has been in a negative cash flow situation for years.
• Former head of the Federal Reserve Board, Ben Bernanke, warned Congress of this situation in 2011: "The unsustainable trajectories of deficits and debt [under current policies] cannot actually happen, because creditors would never be willing to lend to a government whose debt, relative to national income, is rising without limit." [Side note: maybe he should pass along this insight along to the Chicago politicians who want to issue another $10 billion in debt to help fund a $28 billion debt liability shortfall, i.e. “creditors will never be willing …”]
• The numbers spelling out the crisis is pretty simple: Social Security and Medicare have unfunded liabilities over the next 30 years of of a whopping $82 trillion because 74 million Baby Boomers will be entering both systems over that time period.
• To fund this shortfall without changing benefits or the parameters of the program, taxes would have to be raised over $2.7 TRILLION a year for 30 years. 
• This would raise the annual Federal budget by over 60%.
• It also means that on average, every American family would have to pay an additional $22,000 a year in extra taxes to cover the shortfall.
• And taxing the rich, the inane all-purpose solutions from Democrats does not work since even if you doubled the existing top two tax brackets to 70% and 74%, that would only close 20% of the deficit.
• And it probably would not even do that since who would work hard and long to earn a lot of money just to give over 70% of it up to inept government bureaucrats , thus, making the shortfall covered less than 20%.
• And what if you did not tax the rich more but somehow could confiscate all of their money and liquidate it, something that would be impossible to do but what if: if you took the wealth of the ten richest people in the county and somehow used it to fund the $82 TRILLION shortfall you would cover about….1.4% of the $82 TRILLION.
• If you took the the wealth of the next 10 richest Americans you would not come close to that 1.4% of the first ten since those top ten folks are truly head and shoulders above even the 11th to 20th richest Americans.
• So “taxing the rich” is stupid if you think that it will close the $82 TRILLION gap, the numbers do not lie.
• Totally eliminating the defense budget for 30 years, which will never happen, would cover less than 25% of the $82 TRILLION.
• Eliminating all anti- Federal government spending for 30 years, which will never happen, would not do much better.

Nasty numbers telling a nasty story. And the longer that Washington waits to fix what is clearly broken and breaking, the harder the solutions will be to find and the harder the consequences will be on those that rely on Social Security and Medicare to live and stay healthy.
So don’t worry about whether the Russians colluded with Trump or Hillary. Don’t worry about who wins the midterm elections. Don’t worry about climate change. Because within the next ten years, a whopping and growing $21 TRILLION national debt and an $82 TRILLION Social Security and Medicare shortfall will crush any petty concerns you have today. The numbers do not lie.

2) So Medicare is racing towards financial insolvency and yet, stupid politicians in D.C. want to go to a single payer health insurance program for all Americans, the so-called “Medicare for all.” This means that the government would take over all aspects of every American’s health insurance and medical care needs under the Medicare umbrella even though it cannot fund its current needs and never mind adding hundreds of million Americans onto the program.

And as we have pointed out any number of times, such a government take over of a country’s health care industry has been a financial and quality disaster. From Canada to England, wait times for medical care goes up and the quality of that care goes in the dumper. Never mind the cost of this inane “Medicare for all” nonsense:

• According to an analysis by the Mercatus Center at George Mason University, The “Medicare for all” program would increase government healthcare spending by a whopping $32 TRILLION over just the next ten years.
• Thus, given the $21 TRILLION national debt and the $83 TRILLION shortfall in the current form of Medicare and Social Security, this program would bring total Federal government debt in these areas to an unfathomable $136 TRILLION.
• This would put the per household debt burden on average to over $1,000,000 each.
• Obviously, the whole system collapses long before we actually get to this $1,000,000 level.
• At $32 TRILLION in the first ten years, the average increased government spending on healthcare would be about $3.2 TRILLION a year.
• This would mean that the Federal government spending, and increased taxes, would have to go up by over 70% a year.
• And as we discussed above, raising taxes on the rich to pay for this is still a stupid idea since confiscating the entire wealth of the ten richest Americans would cover about 3% of this increased government tax need.
• If you only took 10% of their wealth you would cover only .3% of the program’s cost and raising taxes on only their income would be too small to measure.
• And since the current Medicare program loses tens of billions of dollars every year from criminal fraud, imagine how many hundreds of billions of dollars would be lost annually to criminal fraud in a “Medicare for all” program.

Now, supporters of “Medicare for all” would claim that the country would see savings elsewhere from this type of program since Medicare would pay all of the country’s healthcare expenses. But the supporters fail to point out that their program requires doctors and hospitals to accept 40% less than what they get paid today which would result in:

• Doctors getting less compensation are less likely to stay in the profession, making the current doctor shortage even worse, greatly expanding the time it takes to see the remaining doctors, and increasing costs since the supply would go down without a corresponding decrease in demand.
• Future doctors are less likely to enter the profession since their earnings would be greatly reduced and they would spent so much more of their time dealing with likely inefficient and ineffective government bureaucracies than actually caring for people.
• And the Mercatus study showed that reducing hospital payouts by 40% would result in about 80% of those hospitals to be in an unprofitable mode almost overnight.

Thus, the numbers show that “Medicare for all” would result in longer wait times, lower quality, fewer doctors, financially at risk hospitals, more bureaucracy, more fraud, and unbearable Federal government debt. The numbers do not lie.

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:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

September, 2017, Part 3, Political Class Insanity: The Fiscal Insanity and Ignorance of Democrats

It is the beginning of another month which means it is again time to review the latest political class insanity from Washington and around the world. Political class insanity takes many forms including the wasting of taxpayer wealth, criminal fraud within government programs, inane and stupid political quotes and actions, the inability to create and implement effective and efficient government programs, stupid and ill performing economic policies and strategies, and other forms of insanity that continue to evolve and surprise and shock us.

1) I am not a fan of either political party, Republican or Democrat. Both parties have been responsible for running up a whopping national debt of almost $20 trillion without resolving a single issue facing Americans today. They are more concerned about their own greed and status than addressing any problem. Our schools still under educate, our infrastructure is still falling apart, we have been and are still embroiled in non-winnable foreign country conflicts, we have no overarching energy strategy or plan, the list of failures goes on and on.

But you have to hand it to the Democrats for being the much bigger screwups than the Republicans. Just look at their history of governing:

• Early in Obama’s Presidency, the Democrats controlled both houses of Congress and the White House but somehow managed to preside over the worst economic recovery in about 80 years, ran up the first annual Federal government trillion dollar deficit and then followed up that horrific performance with three more trillion dollar deficits, enacted Obama Care which is probably the worst piece of legislation ever passed by Washington, etc.
• At the state level traditionally Democratic states Illinois, California, and New Jersey are rapidly approaching fiscal insolvency and meltdown.
• At the local level, traditionally Democratic cities have either gone bankrupt (Detroit, Michigan, Stockton,California, and others), are heading for bankruptcy (Chicago), or are overcome with high levels of murders and violent crime (Chicago and Baltimore).

Quite the inane record of constant failure. But Kyle Becker, writing for the Independent Journal Review in early August, 2017, highlighted some election numbers that show how badly Democrats have performed recently and how Obama has probably contributed to more destruction of the Democratic party than anyone else ever despite having been elected President for two terms:

• If you look at the state governments where Democrats control both houses of the state legislature and the governor’s mansion (a political trifecta), than Democrats rule over only 7.2% of the country’s land mass.
• The Democrats now hold a record low number of trifectas (7) across all of the states.
• Republicans have 24 trifectas across the country, almost four times as many as the Democrats.
• Almost 50% of the country’s residents live in states whose government is completely under the control of Republicans.
• During the Obama Presidency, the Democrats at the state and national level lost over 1,000 governing positions in those levels of government.
• The Democrats now hold a record low number of governorships across the country.
• And things could get worse for the Democrats since in 2018 there are 10 Democratic Senators running for reelection in states that Trump carried in 2016 while the Republicans have only 2 Senators running for reelection that might be in trouble.

Again, I have no use for either party. But you have to be really inept as a political organization to have the results the Democrats have been running up over the past 8 years of the Obama administration. And ineptness is not something the country needs these days, given the many real issues facing Americans every day.

2) Let’s move onto another piece of political class insanity and I am afraid Democrats will do not do much better than what we just discussed. The Mercatus Center at George Mason University recently completed an extensive study along many dimensions (e.g. short term and long term debt, unfunded pension liabilities, etc.) to determine the fiscal condition of each state government. 

A state government in good condition has much more flexibility to serve its citizens since they have a good balance sheet and cash flow. States in bad fiscal shape either have to cut services and budgets or raise taxes which usually ends up in a death spiral of shrinking revenue and rising expenses.

According to their study and analysts Eileen Norcross and Olivia Gonzalez, the following five states are in the best fiscal condition:

1 - Florida

2 - North Dakota

3 - South Dakota

4 - Utah

5 - Wyoming

The following states are in the worst fiscal condition:

50 - New Jersey

49 - Illinois

48 - Massachusetts

47 - Kentucky

46 - Maryland

A few observations about these results:

• With the exception of Kentucky, the worst five states have been dominated by Democratic politicians for decades.
• These five states, according to Mercatus, have massive debt obligations and massive unfunded obligations: “Each state has massive debt obligations. Each of the bottom five states exhibits serious signs of fiscal distress. Their large liabilities and low cash on hand raise serious concerns about their ability to pay bills...Unfunded liabilities continue to be a problem. High deficits and debt obligations in the forms of unfunded pensions and healthcare benefits continue to drive each state into fiscal peril. Each holds tens, if not hundreds, of billions of dollars in unfunded.”
• Which is interesting since these states have some of the highest tax burdens in the whole country with New Jersey having the third highest tax burden on its citizens (according to a Forbes analysis) with 12.7% of citizens incomes being collected as state taxes, Illinois having the fifth highest tax burden (12.6%), Massachusetts having the eleventh highest tax burden (10.3%), and Maryland having the seventh highest tax burden (10.9%).
• In other words, despite taxing its citizens at much higher rates than other states, these fiscally under performing, Democratic controlled states have managed to squander away the high levels of taxes they have collected over the years and still have high levels of debt and liabilities.
• Conversely, the states in the best fiscal condition have low levels of debt, low levels of unfunded liabilities, good cash flows, growing economies, etc.
• And yet they collect far less in taxes then the five worst states with Florida having the 17th lowest tax burden on its citizens (8.9%), North Dakota having the 18th lowest tax burden (9.0%), South Dakota having the second lowest tax burden (7.1%), and Wyoming having the third lowest tax burden (7.1%).
• In fact, three of the top performing states, Florida, Wyoming, and South Dakota, do not even have a state income tax to collect and yet they still far outperform the bottom states which not only have state income taxes by usually high levels of state income taxes.
• Only Utah of the best states has a relatively high tax burden of 9.6% which places it at the 30th lowest tax burden in the country.

Thus, the correlation is pretty strong and yields the following pretty solid conclusions and summary: states dominated by Democrats in elected office tend to have the worst fiscal conditions and worst fiscal management histories even though they tax their citizens at much higher rates than states with Republican domination who have better fiscal management skills yet collect less in taxes on a percentage basis than the worst performing states. The numbers and realities do not lie.

And these conclusions do not end with the top five and bottom five. If you look at the top 18 states that are in the best fiscal health, you see that most are Republican dominated and many do not even collect a state income tax. If you look at the 18 states with a worse than average fiscal condition, you will see that most of them are Democratic dominated and most, if not all, collect a state income tax.

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Again, I have little respect and use for either party but if given a choice, it is pretty clear that Democrats will tax you more, screw up your state government fiscal conditions more, and in the process reduce your freedom by reducing the amount of wealth you get to retain and have to use as you please.

More insanity to follow this week.

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:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

August, 2016, By The Numbers: Low Taxes Mean More Fiscally Sound States, Better Economic Conditions, and More Individual Freedom

Back in July, 2016, we ran two consecutive posts that proved by the numbers that if you live in a state with low taxes, not only do you have more individual freedom, liberty, and rights, but the fiscal condition of your state’s financial picture is much more solvent and viable. One would think that a state that collects more taxes for the state government functions that they would not be in dire economic straits. But the reality of the numbers proved just the opposite: the more that a state government’s politicians tax its citizens the more likely they are to over spend and put their state government into financial stress. Those posts are listed below:

July, 2016, Part 1 and Part 2, By The Numbers: Low Taxes Mean More Fiscally Sound States and More Individual Freedom:
http://loathemygovernment.blogspot.com/2016/07/july-2016-part-1-by-numbers-low-taxes.html

http://loathemygovernment.blogspot.com/2016/07/july-2016-part-2-by-numbers-less-taxes.html

We will continue this analysis today with another set of data to see if we can again prove, with real world data, that low taxes results in better lives, more freedom, and more economic growth.

Let’ start with a recent analysis from the Cato Institute and their latest analysis of how freedom varies across every state in the union. Cato looked at and analyzed dozens and dozens of factors including taxation, regulations, crime rates, and many, many other state level factors to determine a rank ordering of states from most free to least free. Based on their in-depth analysis they found that the citizens living in the following ten states had the most individual freedom:

1 - New Hampshire
2 - Alaska
3 - Oklahoma
4 - Indiana
5 - South Dakota
6 - Tennessee
7 - Idaho
8 - Florida 
9 - Iowa
10 - Arizona

The states with the least amount of freedom for its citizens turned out to be:

41 - Kentucky
42 - Maine
43 - Rhode Island
44 - Illinois
45 - Connecticut
46 - Maryland
47 - New Jersey
48 - Hawaii
49 - California
50 - New York

We will use these ranking orderings of ten most free and ten least free states for the basis of our analysis.

1) Let’s start with data from the Wallet Hub website. This website analyzes the tax burden by state and rank orders the results by least taxed states to most taxed states. If we take the Wallet Hub tax rankings of the most free states above we get an average rank of 13.2. 

If we take the Wallet Hub tax rankings of the least free states above we get an average rank of 42.5. Thus, very clearly we see that the most free states strongly correlate with low taxes by a factor of three to one if we look at average rankings vs. the least free states that have much higher taxes.

2) Let’s move to the fiscal condition of health and condition of each state government. The Mercatus Center at George Mason University does a regular study that analyzes the fiscal condition of every state government and then rank orders its findings from states in the best fiscal condition to states in the worst fiscal condition.

If we take the Mercatus rankings of the fiscal condition of the most free states above we get an average rank of 13.4. If we take the Mercatus rankings of the fiscal condition of the least free states above we get an average rank of 44.3. Thus, very clearly we see that the most free states correlate with those states having state government that are in the best fiscal condition and the least free states tend tobe in the worst fiscal condition.

3) Let’s move to Bureau of Labor Statistics (BLS) results that estimate the unemployment rate on a state by state basis. If we take the BLS rankings of the unemployment rate of the most free states above we get an average rank of 20.9. If we take the BLS rankings of the unemployment rate of the least free states above we get an average rank of 28.2. 

Thus, very clearly we see that the most free states correlate with those states having the lowest unemployment rates and the least free states correlate with those states that have the higher unemployment rates.

4) Let’s move to the economic growth rates at the state level as analyzed by the Business Insider website. The Business Insider does a regular study that analyzes the annual economic growth of every state and then rank orderings its findings from states with the highest economic growth rates to states with the worst economic growth rates.

If we take the 2015 Business Insider rankings of state level economic growth of the most free states above we get an average rank of 24.0. If we take the Business Insider rankings of the state level economic growth of the least free states above we get an average rank of 30.4. Thus, very clearly we see that the most free states correlate with those states having the higher economic growth rates and the least free states correlate with those states having lower economic growth.

We also looked at longer economic growth rates vs. just the 2015 growth rates that the Business Insider website came up with. The results were essentially the same if we look at the state level economic growth over several years leading up to 2015 where the most free states above had an average economic growth rank of 23.7 while the least free states above had an average economic growth rank of 36.1, the same conclusion that we came to with the Business Insider data: the freer the state the higher the economic growth and the less free the state the lower the economic growth on average.

5) Finally, let’s move to the best places to retire. To be honest, I cannot find the source I used for the best places to retire in rank order by state but let’s go with it anyway! It was a valid site and when I find the source I will put it in here.

If we take the rank ordering of the best to worst retirement states of the most free states above we get an average rank of 21.2. If we take the rank ordering of the best to worst retirement states of the least free states above we get an average rank of 35.6. Thus, very clearly we see that the most free states correlate with those states that are the best options for retirement while the least free states correlate with those states that are the worst options for retirement.

In conclusion, on average states with the most freedom also correlate with the best states to retire to, they are the best states for economic growth and opportunity, they have the lower unemployment rates, they have lower tax rates, and they have state governments that are in the best fiscal condition. On average, states with the least freedom also are the worst states to retire to, they are the worst states for economic growth and opportunity, they have higher unemployment rates, they have higher tax rates, and they have state governments that are in the worst fiscal condition.

Now, strong correlations are not necessarily strong causations. For example, just because a state has a high freedom rating does not necessarily mean that higher freedom causes lower unemployment rates. However, given the overwhelmingly strong correlation between freedom and low government interference in citizens lives, I would much rather live in a state like Florida which has an average rank of 16.1 across the six factors we reviewed above vs. a state like New Jersey which has an average rank of 40.1. That strong of a correlation is mighty powerful from a causation perspective.

When will the American political class figure this out: lower taxes, more freedom likely gives us higher economic growth, lower unemployment, a more fiscally sound government, and generally better lives. The numbers do not lie.

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:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w