Political Elitism and $800 trillion in debt   Leave a comment

The political elites still don’t comprehend the situation we’re in. The federal government is $16 trillion in debt with no signs of actually addressing the issue, but the total debt for the entire country is somewhere around $800 trillion.

The linked story comes out of California where they’re concerned about funding all these transportation projects in a state with the highest income tax and sales taxes in the country. They can’t get what they want because the California constitution was amended back in 1978 (when conservativism began its rise) to require a two-thirds threshold for voter-approved tax bills to pass. So, instead of focusing on cutting spending, the legislature is going to propose a constitutional amendment to allow transportation bills to pass with a 55 percent threshold. Proposition 30 was last year’s temporary increase of state sales tax rates and the personal income tax rates for upper-income taxpayers. Because it passed as an emergency measure, the legislators believe they have a hope that voters will agree to cut their own throats on a more long-term basis.


This is NOT a revenue problem. This is a SPENDING problem. States that held the line on spending – like Texas – are doing fine. States that have blown up their budgets are struggling. The people who ultimately pay the bills are the taxpayers and they can only afford so much out of their paychecks before they decide to move to another state – like Texas, which has not blown up its state budget and has … well, no income tax. In 2000 it was the third most populous state and now it’s the second. Guess why.


More telling is the rate of growth for states between 2000 and 2010. States that grew the most, Nevada and Arizona, are Sunbelt states attracting retirees, so they warp the discussion so I will skip them.




  • Utah – low taxes with jobs and low state debt level (but maybe Bryce Canyon is the real reason people move there).
  • Idaho – low taxes and slightly below average unemployment (I know, the skiing is the real draw)
  • Texas – low taxes, jobs – if it weren’t for Texans, it would be a great place to live (and no, I’m not joking).
  • North Carolina – kind of high taxes, but way better than California and New York and high unemployment (maybe the Brickyard is the draw there)
  • Georgia – relatively low taxes and kind of high unemployment, but low state level, which means taxes are unlikely to increase dramatically.
  • Florida – low taxes and sort of high unemployment with kinda of high state debt level, but like Texas it’s a growing state that has infrastructure needs.

Then go to the bottom of the chart and look at the states that are losing population or just hanging in there. From worst to less bad ….

  • Michigan – high taxes, high unemployment, relatively high state debt level, lousy weather, what’s to discuss?
  • Rhoda Island – relatively low taxes, relatively high unemployment, lots of government programs that lead to high debt level. Highest cost of living in the nation!
  • Louisiana – Midlevel taxes and good jobs, but a lot of people moved out after Katrina and haven’t returned.  Low state debt level, so look for an increase in growth in the next 10 years.
  • Ohio – High taxes and moderating joblessness, but I’ve heard the long-term unemployment rate there is very high. Lots of people left the state during the recession. Thanks to John Kascic’s efforts, the debt level has moderated.
  • New York – second-highest taxation rate in the nation and relatively high unemployment. Highest debt level in the nation. Second highest cost of living in the nation!
  • West Virginia and Vermont (tied with NY for second highest cost of living in the nation) are rural states that are following a long-term trend.
  • Massachusettes – high taxes, midlevel taxes, but the state is mired in 2nd highest debt, so that’s going to change. Tied with Rhode Island for the highest cost of living in the nation.

Note that most of the growth is in “red” states and most of the loss is in “blue” states. It will be interesting (and terrifying) to watch – will the “red” states become more liberal as “blue” state residents move there? This happened to Oregon when Californians moved there. However, when people move for jobs as well as low taxes, they may be less addicted to government. We’ll see. Also note something else. There’s a trend toward less urban states. People are moving to cities in those states, but the states themselves are far less urban. Hmmm? That’s going to require some thought.

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