We have been spending a lot of time lately dissecting the race to bankruptcy court, i.e. what state government or city government will go bankrupt first. Many Democratic states and cities have already entered into financial death spirals as their taxpayer base erodes but the politicians running these cities and states cannot or will not reduce government spending or make government operations more efficient to cope with the shrinking tax base.
The last two posts on this topic can be found at the following links:
https://loathemygovernment.blogspot.com/2026/04/the-race-to-bankruptcy-court-proof-that.html
https://loathemygovernment.blogspot.com/2026/04/the-race-to-bankruptcy-court-california.html
However, we will take a break from this bankruptcy race and discuss some good old fashioned political class insanity for the next few posts.
1)We have often proven that American politicians are very good at over promising results and delivering results that are either over budget, behind schedule, and sometimes never completed. In the process, massive amounts of taxpayer dollars are wasted for little or no benefit in return.
And out in California there is a government project that hit the trifecta: it is over budget AND behind schedule AND is unlikely to ever get completed:
Long ago California politicians promised to build a modern high speed rail line that would run almost the entire length of the state.
Back in 2008, the state government and the politicians that operated it proposed and approved a plan that would build the high speed rail line for $33 billion and would be operational by 2020.
However, 18 years later, the cost is up to $126 billion and not a single piece of track has been laid yet, six years after the project was supposed to be completed.
The schedule now predicts only a short piece of the plan will be completed by 2033, 25 years after the project was proposed and 13 years after the entire eight of the line would be completed.
Recently, Anthony Williams, a member of the authority overseeing the development of the rail one and who also was governor Gavin Newsom’s former legislative affairs secretary, was interviewed by CBS correspondent Jon Wertheim.
When asked by Wertheim if the money for the project was ever there to complete the project when this whole effort started, Williams actually gave an honest answer: "It wasn't. Let's be real.”
Following up on this confession that the estimated money required was never real, California Transportation Secretary, Toks Omishakin, confessed: "There were mistakes made. Some of the criticisms on this project, I think, are very fair. I don't think the voters fully understood, and neither did we in the public sector, what it was going to take to actually get this project delivered."
In other words, people in charge of the project knew early on and over the years that this project was a farce and yet never told the taxpayers.
For context, the transcontinental railroad was built in the 1860s in six years, it ran 1,776 miles, and ran through 15 tunnels that were blasted through mountains.
The California politicians have built nothing after 18 years and they did not have to blast through mountains.
A failure for the ages: over budget, over due and likely to never be completed, a perfect trifecta failure.
2)We have discussed many, many times relative to our theory that a major city and an entire state government is heading towards bankruptcy court in a relatively short time. One of the common failings of these cities and states is that they continually raise taxes on their residents and businesses. At some point, these residents and businesses pick up and move to other areas where the tax burden is far less.
This out-migration of residents and businesses reduces the tax base which reduces the government tax revenue stream. Rather than reduce government spending or make government programs more efficient, the politicians usually take the easy, and wrong, approach and just raise taxes. This drives more tax dollars out of the state or city and eventually the bankruptcy occurs. As we discussed, this financial death spiral dance is already playing out across the country.
But despite the warnings of what happens when you continually raise taxes, apparently the politicians in Minnesota did not get the message:
Some Democratic politicians in Minnesota have proposed that a wealth tax be imposed on state residents worth over $10 million in total assets..
The wealth tax would be 1% of total wealth, not income.
Thus, someone worth exactly $10 million a year would pay a wealth tax of $100,000 a year, independent of any other state taxes.
Concerns have been raised that this could be a slippery slope that today the threshold is $10 million but once millionaires move out of the state and take all their tax revenue with them that amount could be dropped to $5 million or $1 million, or who knows how low?
Seriously: why would anyone continue to live in Minnesota that was wealthy? We have seen it in California and New York: as the tax burden on the wealthy has gotten higher and higher along with more taxes under consideration on the wealthy, the wealthy simply pick up and leave and move to more favorable financial locations such as Texas and Florida.
And the same phenomenon will happen in Minnesota if this wealth tax idiocy becomes law. People will leave, depriving the state government not only of wealth tax revenue but also state income tax, property tax, sales tax, and economic growth since wealthy people are more likely to spend and expand the state economy. That all goes away when the wealthy leave. The concept is simple but apparently too complicated for the simpleton Minnesota politicians to understand.
3)There are not a lot of projects, programs, and efforts that the American political class operate that actually work efficiently. Medicare is going bankrupt, Social Security is going bankrupt, Medicaid is fraught with fraud and corruption, projects that get started and financed but never get completed (e.g. California high speed rail line), taxes and crime keep going up, many state and city government budgets are in a death spiral because of government overspending and under performance, the list of failures of American politicians sometimes seems endless.
And to this list of government
failures we may have to add the United States Postal System (USPS):
The USPS recently announced that it would temporarily stop making financial contributions to the Federal retirement annuities for USPS employees and retirees.
The USPS needs the cash that is diverted from retirement accounts in order to continue paying for current workers, suppliers, and keep mail deliveries functioning.
The USPS chief financial executive, Luke Grossman, has described the current postal situation as an “ongoing, severe financial crisis.”
He also said that USPS could run out of cash as early as February, 2027 unless severe corrective actions are taken.
Grossman stated that keeping day to day operations going has precedent over long term pension and retirement funding.
As a result, current short term plans call for raising the price of first class mail, post cards, and international mail which in turn will reduce mailing volumes and make the situation worse.
None of this should be a surprise since the financial crisis has been boiling up for decades.
The amount of annual mail volume that was 220 billion pieces in 2006 is now about 110 billion a year now, a 50% decrease.
This has resulted in the operation losing over $18 billion over the past two years.
You have to feel sorry for retired postal workers since it looks like they are the first ones that will suffer the inability of the American political class to fix a problem that has been growing for decades. The industry and business has been in a steep decline for twenty years. It is not going to revive itself, people are paying bills online, they are sending christmas and birthday wishes online, businesses are advertising more and more electronically, first class and other mail options are a dying business.
Personally, I have two observations. First, every time I am out of town for a while and my held mail is delivered, I sort it into two piles: personal mail such as bills, correspondence with friends and family, etc. go into one pile to be counted and advertising pieces of mail, the vast majority of which I never asked to receive, go into another pile. When both piles are counted, consistently 90% or so of mail received is mailings that I could do without. My life would actually be simpler since almost all of the non-personal mail I receive has to be walked over to the recycling bin.
And second, the service provided by at least my local post office has been pretty atrocious lately. The mail piece I send out never gets delivered to the addressee. Mail pieces sent to me never get delivered. Mail pieces mailed four weeks ago via first class mail finally get delivered. I have gone out of my way to avoid dealing with my local post office, even traveling to the next town over whenever I have to mail something of importance.
The bottom line to my mail experience is that I do not want to pay more and more for a government service that does less and less in an inefficient and sloppy way, a service that is in severe decline. Go to an everyday other mail delivery calendar (e.g. who cares if the car dealership ad shows up two days later than usual), shut down low performing and unnecessary post office locations, etc. Nothing is going to reverse the declining market for post office services, best to reduce the bloat, reduce the taxpayer expense and let it eventually die a natural death like other products and services have done throughout history.
But we know that will not happen. The political class will wait until the situation hits a severe crisis mode and then will act hastily and irrationally due to the time crisis which always means the taxpayer will pay more and get less benefit.
That will do it for today' s insanity: the USPS continues to implode with no plan to fix it, Minnesota politicians’ economic ignorance and stupidity, and the California high speed rail line is still not up and running.
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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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