July, 2016, Part 1, By The Numbers: Low Taxes Mean More Fiscally Sound States and More Individual Freedom

On a periodic basis we do some posts that fall under the theme of “by the numbers.” Rather than trust what the American political tells us about reality, we like to examine the real numbers and the real reality in the world to understand what is actually going on. Relying on politicians, and their cohorts in the media, to tell us what is reality is always a sucker bet. They have their own agendas and goals, usually centering around their needs and self-enrichment. So we need to look at the reality of the numbers to determine what is really going on.

Previous analyses of “by the numbers” can be accessed by entering the phrase in the search box above. This is the third and final post this month where we look at the numbers to truly find out how good, not likely, or bad, most likely, the American political class is doing in managing our tax dollars, protecting our freedoms, and resolving major issues that affect all of us. 

Today and tomorrow we are going to focus on economic freedom which is tightly linked with political freedom. I say this because the less money the government and the American political class allow you to keep from your work endeavors, the less overall freedom you have. You have less freedom, options and choices to send your kids to better schools, to start a business, to donate to charities, to retire in better financial shape, or to just enjoy life to the degree that you should be able to based on how hard you work. 

Today we will prove our constant libertarian point in this blog that the less government governs the better off everyone is on average. That the most heavily taxed states are usually the states in the worst financial shape which will eventually require residents of those states to pay more and more in taxes which will result in less and less freedom. As a result, as the numbers will show, that is why more and more people are leaving the highly taxed, financially distressed states for states that afford them the maximal return on their hard work and wealth. As always under this theme, you will see that the numbers do not lie. This is the cold reality of overreaching, freedom reducing politicians in this country today.

Let’s start with some numbers from a recent article and analysis from the Investors’ Business Daily website, written by John Merline. They recently ran an article where they found that the most financially sound states are are currently and/or historically have been operated by Republican politicians. Conversely, the financially unsound states have traditionally been operated by Democrats.

Their analysis is based on research and number analyses by the Mercatus Center operating out of George Mason University. Details of their methodology include:

• They ranked the fiscal status of each state and state government along five criteria.
• Government numbers and data were used to analysis the five criteria included such fiscal tasks as a state’s ability to pay its short term bills, meet longer term financial obligations and liabilities such as pension and healthcare expenses, budget management, service-level solvency measures a state’s ability to respond to a demand for increased spending, and trust fund solvency measures unfunded pension liabilities and state debt.

The ten most fiscally sound states are:

1 - Alaska

2 - Nebraska

3- Wyoming

4 - North Dakota

5 - South Dakota

6 - Florida

7 - Utah

8 - Oklahoma

9 - Tennessee

10 - Montana

Most of these states have been run by Republicans for a very long time with the exception of Florida which now has had a Republican governor for the past six years and whose both houses in the state legislature are Republican controlled. Living in these states is a good thing from a taxation perspective since they are the top states in a fiscal position to meet the five financial criteria listed above, meaning that need for more taxes is less likely than in the other states. This provides more freedom and liberty to residents of these states.

The worst states from a financial stability perspective are:

41 - Maryland

42 - New York

43 - Maine

44 - California

45 - Hawaii

46 - Kentucky

47 - Illinois

48 - New Jersey

49 - Massachusetts

50 - Connecticut

These states, with the exception of Kentucky, have been operated by Democrats for the longest time. Residents in these states are most likely to see their taxes go up in the future, and their freedom levels go down, since these states are most likely to need additional tax revenue to cover the failed financial management skills of the mostly Democratic state politicians. As we said above, as taxes go up, your freedom of choice for everything from your kids’ schools to your vacation experiences goes down.

Let’s move from the numbers that describe the financial health or sickness of each state and see how each state compares from a taxation perspective. One could make the argument that the reason that the above financial distressed states are in the condition they are is because they tax their residents at very low levels, depriving the state government of tax revenue. Conversely, the financially healthy states may be that way because they place the heaviest taxation burden on their residents, reducing their freedom.

Well, you could make that argument but you would probably be wrong. According to the numbers from the financial advising website, Wallethub, using statistics and numbers from Statista, believe it or not, the above states that are the financial soundest also have considerably LOWER taxes than the states above that are the least financial sound. Let’s see where the above financially sound states rank when it comes to the local and state taxation burden:

1 - Alaska - Wallethub rank - 6

2 - Nebraska - 39

3- Wyoming - 2

4 - North Dakota - 25

5 - South Dakota - 17

6 - Florida - 11

7 - Utah - 10

8 - Oklahoma - 12

9 - Tennessee - 4

10 - Montana - 3

Average rank for lowest taxation of the ten most fiscally sound states = 12.9

Now, let’s look at the ranking of the ten worst financially sound states and their ranking as far as the local and state burden is for its residents:

41 - Maryland - Wallethub rank - 44

42 - New York - 51 (this survey included D.C.)

43 - Maine - 40

44 - California - 33

45 - Hawaii - 49

46 - Kentucky - 27

47 - Illinois - 43

48 - New Jersey - 47

49 - Massachusetts - 46

50 - Connecticut - 50

Average rank for the lowest taxation among the ten most fiscally unsound states = 43.0

The tax burden average rank of the states in the worst financial shape is about three and half times higher than the tax burden average rank of the states in the best financial shape. Thus, one obvious observation is that the more you tax your residents, the worst financial shape your state ends up in. Which means that the taxation burden will have to go even higher in the future to keep the financial solvency of your state whole. And you end up in a financial death spiral.

Lower taxes means more financial integrity in the state government. Who knew? Many of the states in the worst financial shape ask their residents to pay a whopping ten percent or so of their household income to state and local taxes in addition to their Federal income taxes, Social Security taxes, and Medicare taxes. Tough to say you live in a freedom loving state when the various levels of government decimate your income with little societal benefit in return.

So our preliminary analysis of the numbers leads us to conclude that: low taxes = fiscally sound states and state governments. And low taxes also means more freedom and liberty for the residents of those fiscally sound states. Simple logic, solid numbers to support it. Tomorrow, we will continue this number analysis by looking at another measure of state by state financial shape and state by state migration to see if fiscally sound states with low taxes, as we proved today, also increases the wealth and sheer numbers of state residents.

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

Part 1, The Obama Administration: Many Promises Made, No Promises Fulfilled

Before we begin today’s discussion let me state a few facts:

1. I am not a Republican by any stretch of the imagination.
2. Until the November, 2010 mid-tem elections, I had never voted for a Republican for national office in my life.
3. Thus, I have never voted for any Presidential candidate named Bush.
4. I think that politicians are equal opportunity when it comes to corruption, wasteful spending, laziness, and self enrichment, i.e. Republicans and Democrats are no different when it comes to screwing up the country.
5. I was so upset about the Bush administration that I wrote a book about how bad the political class was operating the Federal government and what to do about it, “Love My Country, Loathe My Government.”

Thus, I believe that I am not solely a President Obama basher, I believe that I am a political class basher which, unfortunately, includes about every member of the class.

Which brings us to our next topic, the top ten disappointments of the Obama administration, as identified by the Independent Journal Review, on May 2, 2013. The first ten disappointments were from the Independent Journal Reviews analysis. I took the liberty of adding a few more of my own.

Think back about four years ago. Obama’s approval rating as he came into office was sky high. He could have done just about anything he wanted, good or bad, since his party controlled Congress. He made many promises, economically, politically, and internationally. He promised to unite the country. He promised to fix the economy. He promised a lot.

And he delivered very little. The economy is still in the dumps. Our international standing and respect is in retreat. Over 20 million Americans are unemployed or underemployed. Food aid is at an all time high. His approval rating has sunk like a rock. Government surveillance and the destruction of freedom and rights are at an all time high. And his promises have failed miserably at becoming reality as the following review and analysis shows.

1. Close Gitmo

"As President, I will close Guantanamo, reject the Military Commissions Act and adhere to the Geneva Conventions." Four years later, Gitmo is still open, the American taxpayer continues to pay billions of dollars to manage and expand the facilities there, long time inmates are in the midst of a hunger strike and forced feeding, and the President recently promised to again to close the facility but admitted he had no idea how to do it.

This was supposed to be a major international coup for the President. He and his supporters said that this type of detention facility was an embarrassment to our ideals of liberty and needed to be shut down. So much for shutting down this embarrassment.

2. End Afghan War Quickly

"After 18 months, our troops will begin to come home [in June 2011]… [O]ur troop commitment in Afghanistan cannot be open-ended – because the nation that I'm most interested in building is our own." Thus, this promise would have had most of our troops and financial resources out of the country by Afghanistan by December, 2012 if the President was able to hit the 18 month target.

The U.S. military will be in Afghanistan at least until 2014, and possibly longer, along with the associated taxpayer cost. Troop withdrawals have been modest since these statements.

3. Stimulus - Unemployment Below 5%

President Obama's stimulus package passed in 2009 and cost the American taxpayer over $800 billion. The administration boldly stated that if the stimulus package was not implemented, the U.S. unemployment rate would go as high as 8%. His stimulus program promised to get unemployment under 5% by May 2013 without millions dropping out of the labor force to get to that level.

Well, it is May, 2013 and since the stimulus was passed, we have suffered through the following disappointments:

• The stimulus package was passed AND the unemployment rate did get to over 8% despite the promises of the stimulus.
• In fact, this administration set a record for most consecutive months with the national unemployment rate being over 8%.
• The promised 5% unemployment rate is no where in sight.
• The truer picture of unemployment, where we include both the unemployed and the underemployed, is in the 14% range which translates to over 20 million Americans in need of better job opportunities.
• A recent poll by Accenture found that 41% of U.S. workers who graduated from college in the last two years are underemployed and working in jobs that did not require a college degree.
• The poll also found that only 16% of college students who will graduate this year had already landed a job.
• Worse, 32% of the 2011 and 2012 college graduates who are employed make $25,000 or less in annual salary.
• Household wealth and income has dropped substantially AFTER the Great Recession ended.

Seems you cannot be much further away from the President’s economic forecast.

4. Shovel Ready Jobs

"Shovel-ready was not as shovel-ready as we expected," said the President in one of the bigger under statements of his administration. One of the biggest catch words of the stimulus program was that the money would be put to work immediately in so-called “shovel-ready” jobs.

These jobs would be good paying, solid, long term jobs that built roads, repaired bridges, retrofitted schools, and did other good for society immediately. Several years later, even the President realized that there were no shovel ready jobs. Instead, the administration spent taxpayer wealth on replacing windows in a national park building that had been shut down and would never be reopened, a study of insects on a an island half way around the world, and hundreds of other equally inane and useless programs, none of which were shovel ready jobs.

Even if you buy the administration’s contention that the stimulus created over 2.2 million private sector jobs:

• Many of them were part time jobs.
• And if you divide the number of jobs “created” into the total cost of the stimulus you see that each of these private sector jobs cost over $375,000 each to create. Hardly a cost efficient way to get people back to work.
• Many other jobs that were “created” turned out to be government jobs, which require that taxpayers pay for them every day going forward.

Thus, not only was “shovel ready” a myth, the ability of massive government stimulus and deficit spending to create jobs turned out to be a myth.

5. Most Ethical & Transparent Administration Ever

"I won't stop fighting to open up government... we have put in place the toughest ethics laws and toughest transparency rules of any administration in history." Unfortunately, the Obama administration is even more secretive and unethical than the Bush administration:

• When the President was awarded an award for supporting transparency in government, the presentation ceremony was held in secret with no members of the press being present.
• When Bloomberg tried to get simple government employees travel records under Freedom Of Information (FOI) guidelines, the ordeal was stonewalled and stalled way beyond reasonable time frames. Details for Bloomberg’s FOI adventure, along with other serious transparency transgressions, can be accessed at:

http://loathemygovernment.blogspot.com/search?q=freedom+of+information

• When four brave Americans were unnecessarily murdered in Benghazi, Libya last fall, the administration including the President, Secretary of State Hillary Clinton, the State Department, and Defense Department hid behind false stories and stonewalled all attempts to find out the why and the who of the disaster, withholding information and trying to silence government whistle blowers.
• This past week the the Associated Press conducted a study showing that in 2012 the Obama administration rejected more FOI requests on national security grounds than in any year since Obama became President. The report quoted Alexander Abdo, an ACLU attorney for its national security project, as follows:

"We've seen a meteoric rise in the number of claims to protect secret law, the government's interpretations of laws or its understanding of its own authority. In some ways, the Obama administration is actually even more aggressive on secrecy than the Bush administration."

If this is his idea of transparency, I cannot imagine what his definition of opaque is.

6. Would Not Rest Until More Jobs, etc.

"But I want you all to know, I will not rest until anybody who's looking for a job can find one -- and I'm not talking about just any job, but good jobs that give every American decent wages and decent benefits and a fair shot at the American Dream." The Independent Journal Review claims that the President has taken at least 57 vacation days since making this statement in late 2009.

I am not saying the President should not be taking vacations to recharge his batteries and energy levels. It is a high stress job that requires some time off. However, the 57 vacation days probably underestimates the time he takes away from working on job and economic issues:

• How many meetings has he had with NFL, NHL, NBA, college, and other sports teams that have been crowned champions in their respective sports? These types of distractions have nothing to do with governing and creating a healthy economy, they only stoke his ego.
• How many meetings and political fund raisers has he attended just this year that have nothing to do with creating a healthy economy?
• This week the President was traveling around Mexico for no apparent critical reason. Would not spending time at home governing and trying to fix the economy have been a better use of time?
• A recent public opinion survey by Pew found that the overwhelming, most critical issue facing the President was the economy and jobs. He must have not read the poll or understand Americans’ priorities since he has been so busy working on immigration and gun control, issues that are extremely minor in Americans’ minds, playing a lot of golf, taking vacation, socializing with sports teams, hosting a concert at the White House, attending campaign fund raisers, etc.

That's enough for today as far as broken promises. We will continue with this list tomorrow, a list of non-achievement that would make any procrastinator proud.

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.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w