As more and more people and businesses leave the state, the state loses tax revenue and jobs which results in budget shortages and more and more unfunded financial liabilities. This causes the political class to raise taxes and reduce government services which drives more people and business out of the state and the financial death spiral starts.
Thus, it is our opinion that the state of California and possibly a California city, e.g. San Francisco, will be the first state and next large city to go bankrupt. However, they will face some tough competition from other states and cities in the race to the bankruptcy court steps. New York, New Jersey, and Illinois have also entered into a financial death spiral. New York City, Chicago, Baltimore, Philadelphia and other cities are also strong contentions to be the next major city to go bankrupt.
Consider the assets of these other government entities in the race to bankruptcy:
1) An article from the American Patriot Forum website showed that New York City is suffering the same affliction that cities and California:
- According to the New York Post, there have been more than 300,000 change of address requests submitted to the Post Office since March in New York City.
- The obvious conclusion is that many city residents are hitting the road, much like the mass exodus out of California, as people look for lower taxes, lower crime rates, and a better quality of life.
- Michael Hendrix is the director of state and local policy at the Manhattan Institute: “I think people are afraid. They’re afraid of catching a deadly virus and they’re afraid of crime and other quality of life concerns. One thing we also hear is about trash and cleanliness of the city.”
- From other sources we know that there is a garbage/sanitation issue in the city as the city cannot keep up with the garbage accumulating on the streets of NYC.
- Kathryn Wylde is the head of the Partnership for New York City: “The biggest reason for people leaving the city is uncertainty about when the pandemic will be over and how quickly the New York economy will recover. More than half a million city residents who were employed in the retail, restaurant, services sectors have lost their jobs and cannot afford city rents. The late decision on re-opening public and private schools forced many families to relocate so they could make enrollment deadlines in districts where they were living during the pandemic.”
- The Partnership has pleaded with the Mayor to crack down on crime and quality of life issues which apparently has not happened.
Now, some of those change of address requests may be temporary for any number of reasons. But the sheer magnitude that is inconsistent with past years is a strong indicator that people are leaving NYC just like they are leaving California. This reduces the tax base and job base which results in lower tax revenue streams which means more tax hikes, more new taxes, and lower government services and the spiral is gaining speed.
2) A recent article on the Cracked Politics website reinforced the above points:
- The number of people leaving NYC, measured via change of address filings with the Post Office, has more than doubled in the past year.
- 295,103 filings were done in 2020 so far and is more than double the 2019 filings.
- And it could actually be worse than this: “Since the data details only when 11 or more forwarding requests were made to a particular county outside NYC, the number of moves is actually higher.”
- This information is consistent with other sources of data including opinion surveys and real estate transactions.
- From March to July this year, 245,000 change of address filings were done compared to just over 100,000 in those same months in 2019.
- Shootings and murders in the city are likely to be the highest level in at least ten years.
- In 2019 there were 295 murders but so far this year in NYC there have been over 400 murders.
- In all of 2019 there were 828 shootings while through November 15 of this year there have been 1,667 shootings.
3) According to the Patriot Daily Press, higher and higher crime in NYC is not restricted to the streets:
- Recently a city woman was shoved onto the subway tracks at a Manhattan subway station but luckily suffered only minor injuries since she got back safely just before a subway train arrived.
- The same day a man was pushed onto a subway track after refusing to give a panhandler any money. Fortunately, he was able to claim back onto the platform before any trains arrived.
5) And much like Silicon Valley billionaires and businesses are moving out of California, Wall Street billionaires and businesses are moving out of New York City:
- According to a recent NewsMax article, “A bevy of Wall Street executives, bankers and fund managers are abandoning New York for Florida, embracing the Sunshine State over metropolitan New York as the coronavirus pandemic has eliminated many benefits of working from a global financial hub.”
- The article points out that Florida has lower taxes overall, no state income tax, better weather, much lower housing costs, lower commercial office rental rates, and more freedom to move about and be free (visiting museums, eating out at restaurants, etc.) in the age of covid.
- Well over two dozen financial firms associated with Wall Street are either in the process of moving company operations to Florida or have already done so.
- Elliott Management, Citadel and Moelis & Co are just some of the NYC companies who have committed to opening offices in Florida or allow their moneymakers to be based in Florida.
- Goldman Sachs is considering moving some asset management staff to the state.
- "I absolutely love it here and am trying to get some friends to move down here," said Kevin Couper, senior vice president at Wealthspire Advisors, who moved to South Florida six months ago. "People are able to live their lives down here."
- Elliot Management, which manages $41 billion worth of investments, will open an office in West Palm Beach, Florida in 2021.
- Elliot’s chief executive has worked in Florida the entire length of the pandemic.
- Another hedge fund, Citadel, will open an office in Miami next year.
- Blackstone will move hundreds of jobs to Miami next year also.
That will do it for our discussion today on other cities and states that may beat California and California cities to the bankruptcy court. Politicians in places like California, New York, NYC, San Francisco have screwed up the quality of life and freedom for their residents that those residents and the companies they work for have decided they need to leave, for their safety of their employees and the financial viability of their businesses and their families.
And the sad part is that these same politicians do not realize what they are doing and keep repeating the same mistakes: higher tax rates, new taxes, defunding police departments which endangers citizens' lives and property, and overall decreasing the quality of life.
More insanity from these same financial death spiral causing, inane politicians in our next post.
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:
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
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