Posted on 12/04/2012 4:19:20 PM PST by DeaconBenjamin
Thinking about buying a house? Or a municipal bond? Be careful where you put your capital. Don’t put it in a state at high risk of a fiscal tailspin.
Eleven states make our list of danger spots for investors. They can look forward to a rising tax burden, deteriorating state finances and an exodus of employers. The list includes California, New York, Illinois and Ohio, along with some smaller states like New Mexico and Hawaii.
If your career takes you to Los Angeles or Chicago, don’t buy a house. Rent.
If you have money in municipal bonds, clean up the portfolio. Sell holdings from the sick states and reinvest where you’re less likely to get clipped. Nebraska and Virginia are unlikely to give their bondholders a Greek haircut. California and New York are comparatively risky.
Two factors determine whether a state makes this elite list of fiscal hellholes. The first is whether it has more takers than makers. A taker is someone who draws money from the government, as an employee, pensioner or welfare recipient. A maker is someone gainfully employed in the private sector.
What happens when these needy types outnumber the providers? Taxes get too high. Prosperous citizens decamp. Employers decamp. That makes matters worse for the taxpayers left behind.
Let’s say you are a software entrepreneur with 100 on your payroll. If you stay in San Francisco, your crew will support 139 takers. In Texas, they would support only 82. Austin looks very attractive.
The second element in the death spiral list is a scorecard of state credit-worthiness done by Conning & Co., a money manager known for its measures of risk in insurance company portfolios. Conning’s analysis downgrades states for large debts, an uncompetitive business climate, weak home prices and bad trends in employment.
(Excerpt) Read more at forbes.com ...
We all live in a death spiral country.
Our entire civilization is in a death spiral.
Any survey like this that misses Michigan is crap. Michigan is infested with bums, welfare leeches, a million or more fat welfare mommas, workmen’s comp thieves, Social Security disability liars and fat-ass municipal workers who retire at age 45, claiming an ache in the ass.
I’ve had it. I sure hope the Mayans are right. Barry Benghazi’s “cliff” thing is wearing my ass out.
What happens when you vote in a Kenyan hustler. Once was enough. Twice is certification of national insanity. So is George Bush on the tube today back pimping for a mass amnesty. You see the things he really cares about
Mayan calandar or fiscal cliff pick your posion
I thought Ohio was in wonderful condition because of the republican governor. Of course, I also thought they had a handle on voter fraud.
I own two pieces of property in the death spiraling state of New Mexico, but both are paid for, and both have fairly low taxes, so it’s no big deal.
That big sucking sound, here in Ohio, is coming from Cleveland.
Kentucky was a surprise to me.
I don’t agree with their analysis.
Start 1776 Finish 2008 It came to pass and just about right on schedule according to Alexander Tyler.
About the time our original thirteen states adopted their new constitution in 1787, Alexander Tyler, a Scottish history professor at the University of Edinburgh, had this to say about the fall of the Athenian Republic some 2,000 years earlier:
“A democracy is always temporary in nature; it simply cannot exist as a permanent form of government.”
“A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury.”
“From that moment on, the majority always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.”
“The average age of the world’s greatest civilizations from the beginning of history, has been about 200 years”
“During those 200 years, those nations always progressed through the following sequence:
1. from bondage to spiritual faith; 2. from spiritual faith to great courage; 3. from courage to liberty; 4. from liberty to abundance; 5. from abundance to complacency; 6. from complacency to apathy; 7. from apathy to dependence; 8. From dependence back into bondage”
Unfortunately there are no boundaries to human stupidity. You asked for it and you got it, and we are not done yet.
The interesting part will be what will trigger the BEGINNING and repeat of another cycle and HOW SOON? Could it be a war, a natural disaster or some unexpected unusual happening?
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