Showing posts with label death spiral. Show all posts
Showing posts with label death spiral. Show all posts

Saturday, September 5, 2026

The Race To Bankruptcy Court: Hey California, When Stuck In A Hole, Stop Digging

 Let’s check in with our discussion on which  city or state government is going to  get to bankruptcy court first. Our primary cities in the race to bankruptcy include New York City, Chicago, Los Angeles, San Francisco, and newcomer, Seattle. The state governments that we think are soon heading into bankruptcy include New York, New Jersey, Illinois, and California with Washington state a newcomer to the race.


The reason for returning to this topic in the midst of our corruption series is because there have been some significant developments in the race to bankruptcy court. However, before reviewing the latest news and seeing which state or city is making the best progress towards government bankruptcy, let’s review how these cities and states got themselves into this financial death spiral position to begin with:


  • A government entity keeps expanding its budget, eventually putting pressure on the tax revenue stream it receives. 

  • At some point, rather than cut government spending or make its programs more efficient financially, the politicians in charge raise taxes to meet the ever growing government expenditures.

  • The raising of taxes causes some residents and businesses to leave the city or state for less tax burdensome areas, reducing the tax base and reducing the revenue stream.

  • Rather than cut expenses and become more efficient to match the reduced tax revenue stream, politicians in the above cities or states raise the tax burden even more.

  • This causes more residents and businesses to flee the city or state, further reducing the tax base and tax revenue stream.

  • At some point politicians panic and raise taxes more and start cutting vital government services (e.g. police, fire, education) in order to try and balance government spending against the shrinking tax base and revenue stream.

  • The reduction in quality of government services in particular and quality of life in general drives more residents and businesses out of the area.

  • Eventually, the expenses, costs and financial liabilities outstrip the reduced tax stream and bankruptcy occurs.


Okay that’s the process. Let’s see  what is going on  in the newest and possibly the  strongest contender  for bankruptcy court.


1)An old saying goes as  follows: "When stuck in  a hole, stop digging." When  businesses and residents  are fleeing your  city or  state because of high  taxes, probably the best first step is to stop increasing  current taxes or introducing new  taxes. 


Apparently, that message has not gotten through the thick  skulls of California politicians, a prime state to go bankrupt as residents and businesses  leave the state,  diminishing the state government tax revenue  stream:


  • California motorists currently suffer from the highest gas tax  burden in the country and  sky high  DMV registration fees while driving  on  some of the worst maintained  roads in the  country.

  • On  top of those burdens, the California Energy Commission has suggested that new  rules be adopted for replacement tires that would  make  about 70% of  the current  vehicle tires on the market ineligible to be sold in the  state.

  • Drivers would have to purchase  tires that are more expensive under  the proposed guidelines.

  • Theoretically, the tires that would be  required would be more fuel-efficient and  better from a safety perspective. 

  • However, how much more those  tires would cost and how much  fuel  they would save is open to debate among  parties involved in the tire  business.


Of  all the problems the state is facing, out-migration of businesses and residents, high crime rates, high homeless rates, massive fraud in government programs, bad roads, bad education system, unfunded  financial liabilities, etc., why is reducing the  variety and increasing the cost of replacement tires even on  politicians' agenda  and priority list?


So the state government will go bankrupt but  at  least the  drivers  left in the  state will have fuel efficient  tires.  Great.


2)But the motor vehicle tax revenue insanity in the  state gets even worse:


  • A recent state government budget item quietly allocates  motor  vehicle  registration money to be used to pay for  security details for state politicians long AFTER they have left office.

  • California taxpayer motorists have already funded Kamala Harris’  security staff during  her  book tour last spring.

  • Once Gavin Newsom  leaves office and starts his Presidential campaign, California drivers will be subsidizing his  security details also even though he  will be a  private citizen  worth tens of millions  of  dollars and who can easily afford to fund his own security arrangements.

  • According  to the  budget line  item, this cost to protect  former politicians will run  about $20 million  a year.

  • California Highway Patrol officers would be taken  off their duties to protect the citizens  and businesses of the state and be used to staff security details for former politicians.


More expensive tires  and more  expensive vehicle  registration fees being  used  to protect wealthy former politicians on top of high  gas taxes and high DMV registration fees. The taxes just keep  on coming  and the residents and businesses who no longer want to live under such heavy tax  burdens keep on  leaving.


3)Thank  goodness there are no other  ways to gouge California motorists out of their  money. But wait,  maybe  there  is another way to get blood out of  a rock:


  • California  Democrats in the state government want California drivers to pay a so-called “mileage tax.”

  • Thus,  in addition  to sky high  gas taxes, high motor vehicle  registration fees, more expensive tires, and  the diverting  of registration  fees to pay for security for former politicians, the  new tax would  assess a per mile tax  for state drivers.

  • Their  new tax would likely be between six and nine cents  a mile driven.

  • Thus, a new annual fee for drivers  could range from $900 to  $1,350 if  a driver drove 15,000  miles  a year.

  • The Reform California  organization estimates  that a typical California family with  two cars could end up paying over $4,000 in mileage fees  a year.

  • This would be on top of the $.90 a gallon in taxes and fees California drivers pay for  every gallon of gas they use.

  • The amount  billed for mileage would be calculated in one of two ways.

  • Drivers could  agree  to have  a GPS tracking unit in their car that would report their mileage or  every year they could  go to a state DMV location  to have their odometer read.

  • And the  other  scary part of this planned new  tax is that Democrats have a  super majority in the  state government which means  that taxpayers will have no say in whether  or not this new tax  gets implemented, Democrats in the legislature can do it without permission of those that will be impacted.


The impact of this  fiasco  is not  just that drivers will pay more. The visiting nurse  that visits sick and shut-in customers will see  her costs go up over $1,000  a year, an increased  cost she will likely pass  onto her customers.  The Door Dash and Uber Eats drivers will see their operating costs go up and will pass those increased costs  on  to their customers. The ripple effect will affect everyone  that is still in  the state, 

whether  they drive a car or not.


So, folks are fleeing California because  of high  costs of living and taxation  and what do California politicians do: they layer on three new  taxation  schemes, more expensive tires, diverting  motor vehicle  registration  fees to protect bygone politicians, and taxing every driver in the  state on mileage. 


Hey, state politicians,  listen up: “when you are in a hole stop digging.” When excessive taxation  is drying  up your tax revenue  steam, at least stop  with the new taxes. 


All  of which confirms that the state government of California hasn't learned any lessons and will continue  to be a  strong  contender  for the first state government to go bankrupt.


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Vote Now!!!! Go to to the following link and vote  on which state  or city government you think  will go bankrupt first:


https://www.facebook.com/profile.php?id=61592458935721


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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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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:

Saturday, January 24, 2026

More Proof That California Will Be The First State To Go Bankrupt

 We have had a running  discussion for a number of years under the theory that  certain city and  state governments across the country are on a course to relatively quickly go  bankrupt. The states we think have the  best chance of winning the race to bankruptcy court include California, New York, New Jersey and Illinois. The cities with the best chance include New York  City, Los Angeles, Chicago,  and San  Francisco.

The bankruptcy trajectory is unfolding as follows:


  • State and city politicians continue to implement and manage government programs that are inefficient, ineffective, wasteful, or criminally  infested.

  • Rather than  become more  efficient, the politicians raise taxes which drives residents and businesses to leave and  relocate, reducing the tax base.

  • Faced with a reduced tax base,  rather than cut back  spending to match the reduced tax revenue, politicians typically raise taxes even more, which drives more residents and businesses out of  the state.

  • Eventually police fire,  education, and other city and  state services suffer from lack of funding which  reduces the quality of life and drives more folks out of the  city or state.

  • Eventually, taxes cannot be raised enough on a shrinking tax base to offset the government spending and debt obligations and  the financial viability of the government  entity crashes in bankruptcy proceedings.


Over the years, different states and  cities have jockeyed for the  lead in the race  to bankruptcy. They all share the death spiral scenario laid out above. City-wise, we now believe that New York City will be the next major city to go bankrupt, given the idiotic and naive governing theories of the recently elected communist mayor, Zohran  Mamdani. His communist-like ideas about governing have failed around the  world and historically but that is not stopping him.


However, in a recent post we made the very strong argument that California will be the first state government to go bankrupt. That argument and thesis can be found at the following link:


https://loathemygovernment.blogspot.com/2026/01/will-proposed-california-wealth-tax.html


Since we put up this post, we have  found some additional statistics and realities that reinforce our prediction that California will  indeed be the first state to go bankrupt:


  • For decades, California and its Silicon Valley was the tech center of the nation and world, creating wonderful products and services that served humanity very well.

  • The companies that created these services and products are now household names: Facebook, Google, Tesla, Twitter/X, Apple, etc.

  • This resulted in  incredibly rich companies  and individuals, wealth creation that resulted in fat tax streams for the state government.

  • However,  recent analysis has shown that the share of the nation’s technology workforce is dwindling relatively rapidly in California as companies and  individuals find better taxation and quality of life locations outside of the Valley and state.

  • According to recent  work done by the CompTIA State of the Tech Workforce, California’s share of the country’s technology workforce has decreased from 19% in  2019 to only 16% six years later, a 16% increase.

  • Not only has the  percentage of tech workers gone down substantially in the state, but the size of the national tech workforce has also decreased in the timeframe, giving California a smaller portion of a smaller workforce market.

  • According to the Bureau of Labor Statistics, the technology workforce peaked at around 6 million  workers in 2023 but has shed over 90,000 jobs since then.

  • From  the  middle  of 2022 to the middle  of 2025, California lost 71,000 tech jobs.

  • The CompTIA analysis  predicts that by the decade’s end,  the California share of tech jobs will decline even  further to, 14% of the nation’s share.

  • San  Francisco has been especially hard hit by the cratering of tech positions with downtown office vacancies in the  city currently sitting at 35%.


With AI possibly shrinking down the other wealthy industry in the state,  the Hollywood industry, this declining status of the tech  industry fits right into the flight of jobs and wealth from the state. With high taxes, high crime rates, high regulatory interference in business, high  homeless rates, etc,. the tech  industry and its wealthy and high taxpaying  employees are finding better places to  live and work and create new wealth.


Since  the wealthiest 1% of California residents pay about 40% of  the entire state income tax stream, even small migrations and shrinkage of the tech  workforce and wealthy state residents out of the state will have  a major  negative impact on the state income tax stream and finances. This reinforces our assertion that California still leads the race to bankruptcy court. 


And with wealthy residents and businesses leaving the state, housing values fall which reduces property tax dreams, retail sales fall which reduces sales tax streams, and the financial  death  spiral takes hold.


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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



**********************


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: