Every month we devote posts to just general political class insanity that is running rampant through the country. The members of the American political class continue to show that they are incapable of efficiently operating any level of government in this country.
Even their best efforts are almost always ineffective at resolving any problem facing Americans. They spend a great amount of time not trying to improve the lives of their citizens but continually ensuring their reelection and enriching themselves, their families, and their friends in the process, all at taxpayer expense.
1)We have often talked about the real possibility that a state government will soon go bankrupt. The bankruptcy is likely to unfold as follows:
The state government and its politicians continually raise taxes but do not reduce its spending.
This drives residents and businesses out of the state to find more financial and economic freedom.
As these residents and businesses leave, they take their tax dollars with them, which causes financial strains on the state government budgets.
As the tax revenue decreases, politicians raise taxes more which drives out more residents and businesses which reduces the tax stream even more and the financial death spiral is in place.
It has been our opinion, based on out migration of residents and businesses and the resultant drop in tax revenue, that these states are the most likely to go bankrupt: New York, California, New Jersey and Illinois. The tax burden in these states continues to be very high and the out migration has been most pronounced in states like these.
Recent analysis now shows that New York state has possibly taken the lead in the race to bankruptcy court:
The American Legislative Exchange Council recently released its latest annual report on the economic outlook for each state.
New York state is dead last in economic outlook for the 11th year in a row.
The analysis is based on 15 economic policy variables: tax rates, sales tax burden, tort systems, minimum wage, debt service as a share of tax revenue and other factors.
According to the report: “New York’s across-the-board high tax burden, lack of fiscal constraint and out-of-control debt growth and general unfriendliness to business and worker freedom continue to make the Empire State the Emperor of the Bottom. Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less — especially on income transfer programs — and states that tax less — particularly on productive activities such as working or investing — experience higher growth rates than states that tax and spend more.”
New York had the lowest rankings for state and local taxes, marginal and corporate tax rates.
It ranked 46th for property taxes and 32nd for sales tax.
ALEC chief economist Jonathan Williams said, “New York is the perfect example of a state that can’t get out its own way, thanks to failed, tax and spend approach to policymaking. In order to reverse the devastating trend of outmigration of businesses and individuals, New York needs to embrace commonsense, pro-taxpayer policy reforms.”
Not surprisingly, our other candidates likely to go bankrupt also were rated of having a very high tax burden and dismal economic outlook including Illinois (48th worst state), California (47th worst) and New Jersey (46th worst).
High taxes means lower economic performance which makes life worse for the citizens in these states. It is a pretty straightforward reality but it is a reality lost on the politicians in these states who cannot stop spending more money than they get in tax revenue.
2)Staying with financial distress, a recent analysis by the Travelerz website analyzed the economic and living conditions in each state as it related to the best places to retire and then ranked them from the worst places to retire to the best. Not unsurprising, three of the four states we listed above ranked very low when it comes to attractive places to retire:
California - 49th worst
New Jersey - 46th worst
New York - 44th worst
Thus, it does not appear that the most likely states to go bankrupt are going to be saved by a large influx of retirees since at least three of them are ranked very, very unattractive to retirees. Another reason to continue to suspect that one of these states, and Illinois, we quite soon go into bankruptcy.
3)So, California has the fourth worst economic outlook and has the second worst chance of getting a lot of retirees retiring in the state. Two reasons why California might be the first state to get into a financial death spiral and win the race to bankruptcy court.
And now there might be another reason to bet on California getting to bankruptcy first:
A gas station in California recently broke the $7.00 level for a gallon of gas.
And the price did not just inch over the $7.00 level, charging $7.29 a gallon at a Menlo Park, California Chevron gas station.
And while this is an atrocious price for even California, the overall average price for a gallon of gas in the state recently came in at a still whopping $5.43 a gallon.
The national average for a gallon was $3.68.
Thus, as a result of mostly higher gas taxes courtesy of the California political class, those in California are paying more than 47% higher for gas than the average across the country.
Just another reason for businesses and citizens to leave the state because of the high cost of living in the state, a state that is showing a great chance of getting into the financial death spiral discussed above.
4)One would hope that our politicians were of the highest moral character and behavior. That they were positive leaders in their communities, setting examples for those that they represented in office.
Obviously, this is usually not the case as we have pointed out so many times in this blog. Way too often we see stories of politicians breaking laws, involved in shady dealings, and constantly looking to enrich themselves.
A very bad and recent example of horrific behaviors by an American politician comes to us from Atlantic City, New Jersey:
Atlantic City mayor, Marty Small, along with his wife who is the Superintendent of the city’s public schools, were recently charged with some pretty heinous crimes.
They are accused of having allegedly abused their teenage daughter over a period of several months.
The abuse included beating their daughter unconscious with a broom, threatening to push her down the stairs, and punching her in the mouth.
Another class act from the American political class.
That will do it for today: the race to be the first state to go bankrupt accelerates with New York and California going at it very hard and another despicable performance by an American politician, this time allegedly beating up his own daughter.
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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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