Showing posts with label Illinois. Show all posts
Showing posts with label Illinois. Show all posts

Monday, April 23, 2018

An Illinois County Just Voted To Become A Sanctuary For Gun Owners


An Illinois County board just voted to become a sanctuary county for gun owners.  That would entail not enforcing laws that prohibit the basic fundamental human right of self-defense.


The Effingham County Board approved the resolution 8-1 on Monday which declares that they will not enforce gun laws that “unconstitutionally restrict the Second Amendment.” (Of course, that’s all gun laws based on the Constitution.)  Board members said they felt it was necessary to “take a stand” against the immoral and human rights violations in the form of gun control efforts in the Illinois legislature.


Humorously, Effingham County State’s Attorney Bryan Kibler told Fox News that they decided to “flip the script” and “make this a sanctuary county like they [Democrats] would for undocumented immigrants.”  Kibler admitted the action is largely symbolic and Sheriff Dave Mahon told the Effingham Daily News that the board’s decision would not dictate how his office enforces the law.


Mahon did say, however, that if the state passed a gun control law with dubious constitutionality, he would decide how to handle it after consulting with the state’s attorney and the legal counsel of the Illinois Sheriff’s Association.


As gun control activists ramp up efforts to disarm peaceful citizens, some are taking a stand against such tyranny. “The Second Amendment is not about hunting,” Shannon Alford, the National Rifle Association’s Maryland liaison told USA TODAY at a gun rights rally over the weekend. “It is not about competitive shooting. The Second Amendment is about self-defense. It’s about being able to stop people who would do you harm, whether that’s a criminal or the government.”


And self-defense is a basic human right, making those who march in favor of gun control tyrannical fascists. Gun control “across the pond” hasn’t worked out very well.  Those who defend themselves from thieves are being punished while the criminals are allowed to slash and stab their way through London. But what’s the solution to increased shootings and stabbings in the wake of making an entire nation a gun-free zone? If you ask London’s mayor, it’s more knife control, and no, that’s not a joke. 

Monday, February 5, 2018

White Supremacist Holocaust Denier to Become GOP Nominee in US House Race

Arthur Jones(COMMONDREAMS) — A Holocaust-denying white supremacist, Arthur “Art” Jones, is the only Republican primary candidate running for the U.S. House of Representatives in Illinois’s 3rd Congressional District, meaning he will likely become the party’s official nominee next month, according to local reports. The 70-year-old resident of Lyons, a suburb of Chicago—who, on his campaign website, declares “it’s time to put […]

Tuesday, January 30, 2018

Illinois’ Debt Crisis Foreshadows America’s Financial Future

By Clint Siegner


Those wanting a glimpse into the future of our federal government’s finances should have a gander at Illinois. The state recently “resolved” a high-profile battle over its budget. Taxpayers were clubbed with a 32% hike in income taxes in an effort to shore up massive underfunding in public employee pensions, among other deficiencies.


But, predictably, it isn’t working. People are leaving the state in droves.


In fact, Illinois now leads the nation in population collapse. Statistics show people leaving the state at the rate of 1 every 4.3 minutes and the state dropped from 5th place to 6th in terms of overall population.


Turns out that people with options aren’t planning to stand there and take the epic tax increase.


Illinois officials’ hands are tied. Decades ago, public employee unions successfully lobbied for an amendment to the state constitution which prevents cuts to pensions. The taxpayers are hostages.






Illinois officials are instead considering one final gambit, one well-tried by many insolvent governments through history. They will address the problem of too much debt by borrowing even more money. Specifically the plan under review calls for selling $107 billion in debt in the largest ever municipal bond offering.


Worse, the state would use the borrowed funds to invest in financial markets. The state would purchase stocks and other securities near their all-time highs.


The Illinois credit rating has suffered in recent years, so borrowing costs will be higher. That means the state will need to take on even greater levels of risk to generate returns. What could go wrong?


Illinois is demonstrating a universal truth which certainly still applies at the national level. Governments do not voluntarily shrink. They grow until they can no longer be sustained. Then they get desperate – just before the default.


Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

Sunday, January 14, 2018

Paradigm Shift: Court Rules 11yo Girl Can Treat Her Seizures with Cannabis—In School

cannabisShowing the power of the people to resist the tyrannical war on cannabis, an Illinois court ruled that a little girl will be able to use it in school.

Thursday, December 21, 2017

Illinois Lost 1 Resident Every 4.3 Minutes In 2017, Dropped To 6th Most Populous State

Illinois is drowning under a mountain of debt, unpaid bills and underfunded pension liabilities and it"s largest city, Chicago, is suffering from a staggering outbreak of violent crime not seen since gang wars engulfed major cities from LA to New York in the mid-90"s.  Here is just a small taste of some of our posts on Illinois" challenges:


Given that, it"s hardly surprising that the Prairie State lost a net 33,700 residents in fiscal year 2017, according to the Census Bureau.  Also not surprising is the fact that the mass exodus from Illinois was the largest of any state in the country with lower taxed, lower cost of living states like Texas and Florida posting the biggest gains. 



Of course, the net population loss masks the true gross outflow of Illinois residents as it doesn"t account for natural births/deaths. Assuming that Illinois has the same natural population growth as the U.S. as a whole (0.7%) implies that the state lost a staggering ~125,000 residents in aggregate, or roughly 1 man/woman/child every 4.3 minutes.


Meanwhile, adding insult to injury, the domestic migration out of Illinois was enough to push the state down one notch on the state population ranking tables to just below Pennsylvania. Per Illinois Policy:



Of course, this is all terrible news for Illinois retirees whose pension obligations continue to grow every year and currently stand at nearly $130 billion...


IL Pension


While we could be wrong, the last we checked folks were no longer on the hook to pay Illinois taxes after making the decision to move to another state.  Meanwhile, efforts to offset the lost tax revenue will only result in an acceleration of population declines in the future...


Conclusion: Sorry, Illinois, but your ponzi scheme is slowly coming unraveled.









Monday, December 18, 2017

Chicago Commissioner Pleads With UN To Deploy Foreign Troops On US Soil

Under the guise of stopping violent crime, a County Commissioner in Cook County, Illinois, went to New York City late last week to request that the United Nations deploy foreign troops in Chicago to tackle the city’s “quiet genocide.”



Perhaps, the geopolitical instability on the Korean Penisula and in the Middle East is just one giant distraction. The real action is currently unfolding in America’s out of control inner cities, such as Chicago. There is a pattern emerging across the United States, where inner cities such as Atlanta, Baltimore, Chicago, Cleveland, Detroit, Oakland, Mephesis, and St. Louis are experiencing out of control violent crime with local officials paralyzed.


Earlier this year, President Trump threatened Chicago with sending in the Feds, after crime statistics warned of an alarming surge in violent crime.



Some politicians in Chicago have recommended deploying the National Guard to aid in combating gun violence, but Cook County Commissioner Richard Boykin went straight to the United Nations last week and pleaded with Oscar Fernandez-Taranco of Argentina, the U.N. Assistant Secretary-General for deployement of foreign troops on United States soil. Boykin is seeking international assistance with “horrific levels of shootings” and violent crime mainly on the West Side and South Side communities.


 


Boykin said at O’Hare International Airport on Thursday, “I’m hoping to appeal to the U.N. to actually come to Chicago and meet with victims of violence, and maybe even possibly help out in terms of peacekeeping efforts, because I think it’s so critical for us to make sure that these neighborhoods are safe.”


Boykin told Inc. before his meeting, “the United Nations has a track record of protecting minority populations. There was tribal warfare between the Tutsis and the Hutus in Africa, and they deployed peacekeeping troops there to help save those populations and reduce the bloodshed.”


“We have to do something — black people in Chicago make up 30 percent of the population but 80 percent of those who are killed by gun violence,” he added.



Throughout 2017, President Trump has been fairly vocal about the carnage in Chicago. Last week, he addressed FBI grads in Quantico, Virginia, and asked one simple question: “What The Hell Is Going On In Chicago?” (See: “What The Hell Is Going On In Chicago” And Other Highlights From Trump’s Speech To FBI Grads)



Courtesy of stats from HeyJackAss!, here’s a quick recap of “what the hell is going on in Chicago.”  In aggregate, 3,451 people have been shot so far in 2017, or roughly 1 person every 2.4 hours, and 651 have died from there injuries.


Per the chart below, the violent crime is a persistent cloud over the city of Chicago with shootings and murders happening on a daily occurrence.



Meanwhile, this long-term chart shows why Boykin has met with the United States for the assistance of foreign troops to occupy Chicago. It’s the sheer velocity in homicides in recent years which has local officials frightened.



And lastly, “we can’t wait until the mayor comes up with another 1,000 police to try to make the streets safer. Quite frankly, the people want to be safe right now in their homes and their neighborhoods, and we want to make sure that they’re safe,” Boykin said.


* * *


Meanwhile in Maryland, just outside the hellhole which is known as Baltimore, an entire unit of heavily armed United Nations vehicles sits behind a mysterious Kellogg Cereal Plant (as of September 2017).










Sunday, December 17, 2017

Moody"s Considers Municipal Ratings Changes That Could Push Illinois Into Junk Territory

A few weeks ago, we expressed some level of astonishment that the rating agencies, in their infinite wisdom, decided to bestow an investment grade rating upon a new $3 billion bond issuance by the City of Chicago.  Of course, this wouldn"t be such a big deal but for the fact that the state of Illinois is a financial disaster that will undoubtedly be forced into bankruptcy at some point in the future courtesy of a staggering ~$150 billion funding gap on its public pensions, a mountain of debt and $16.4 billion in accrued AP because they can"t even afford to pay their bills on a timely basis.  Here are just a couple of our recent posts on these topics:


Alas, as Capitol Fax notes this morning, it seems as though Moody"s may finally be waking up to the farce that is their own municipal ratings system and is currently in the process of seeking comments from market participants on proposed changes for states’ general obligation credit ratings, which would include an increased emphasis on debt and pension obligations.  Of course, with their GO rating just one notch above junk, all of those long-only bond funds that have scooped up billions in "juicy" 4% Illinois paper over the past couple of months should probably take notice.








Under the proposed changes, debt and pension obligations will have a 25% weight on state credit ratings, up from 20% currently. The individual state’s economy, another factor in Moody’s ratings, will also have a 25% weight, up from 20%. Governance will fall to 20% from 30% and finances will be maintained at 30%.


 


The debt and pension factor “is critical because debt and pension obligations are the primary long-term liabilities that states have,” Moody’s said in an announcement on the proposed changes Tuesday. “As these liabilities grow, states face rising expenses to pay debt and pension benefits. High fixed debt service and pension costs can crowd out other budgetary priorities and force states to raise taxes in order to meet them. Debt and pensions can curtail a state’s budgetary flexibility and heighten the risk that it will seek to deleverage through a debt restructuring.”



Illinois


Of course, the proposed changes come just after Fitch put out their 2017 State Pension Update which showed that Illinois’ pension crisis is the worst in the nation with an underfunding of more than $151 billion...or $60 billion more than second worst state: New Jersey.








“Six states have long-term liability burdens that Fitch considers elevated [in excess of 20 percent of personal income],” the report said, “with Illinois carrying the highest liability burden at 28.5 percent of personal income.”


 


Fitch Senior Director Doug Offerman said taxpayers should care because the burden takes up more than 28 percent of all personal income in Illinois, “which is essentially a proxy for the wealth level, the resource base of a given government.”


 


“For the last several years the [pension] increases did grow faster, and I would say do crowd out other spending that might have otherwise taken up organic revenue growth,” [Fitch Ratings Senior Director Karen Krop] said.



Meanwhile, State Senator Dan McConchie (R) noted, as have we on multiple occasions, that people are already fleeing Illinois in droves because of its financial crisis and resulting tax burdens.  “Whether it’s through their property taxes or because of the recent income tax increase, they just can’t afford to [stay here],” McConchie said. “This day of reckoning is fast approaching us. I don’t think we want to wait until the absolute last minute to try and do everything we can to really right the ship.”


Unfortunately, Mr. McConchie, we"re afraid your proverbial ship is taking on so much water at this point that it hasn"t a hope of surviving the crushing weight of your state"s mounting debts...perhaps it"s better at this point to simply seek a life raft and follow your constituents to Texas.









Sunday, December 10, 2017

National Health Crisis: US Inner-City Kids Suffer "War-Zone"-Like PTSD

BBC’s ‘America First?’ series sent Aleem Maqbool, a North America correspondent, to the inner city of Atlanta, Georgia, where he uncovered a rather shocking statistic in which 46% of the inner city residents suffered from post-traumatic stress disorder (PTSD), a rate that is much higher than U.S. soldiers (10-20%).



Maqbool describes Atlanta’s inner city environment as a “war zone”, where death and destruction are contributing to high levels of PTSD in adults and children. He further quoted researchers and said levels of PTSD in America’s inner cities are comparable to refugee populations around the world.


To make matters worse, the video makes the claim: gun murder rates (per 100,000) in the US are at astronomical levels when compared to other countries. A startling find, when considering the US, the richest country in the world, does not perform well in the international rankings.



As the crisis spreads, PTSD in children and young adults are sparking a public health crisis, where traumatic events are negatively influencing brain development.


This is already having a significant effect on inner-city youth, who already suffer from broken families, drug abuse, education inequality, and wealth inequality.



Back in 2016, President Trump told the American people the true state of the inner cities. He correctly labeled the areas across the country, a “war zone” (see below).





"The Democrats have failed completely in the inner cities,” Trump said. “For those hurting the most, who have been failed and failed by their politicians, year after year, failure after failure, worse numbers after worse numbers, poverty, rejection, horrible education, no houses, no homes, no ownership, crime at levels that nobody has seen. You could go to war zones in countries that we’re fighting and it’s safer than living in some of our inner cities that are run by the Democrats.”


 


“It is a disaster the way African-Americans are living in many cases and in many cases the way Hispanics are living,” Trump continued. “And I say it with such a deep felt feeling, what do you have to lose? I’ll straighten it out. I’ll bring jobs back, We’ll bring spirit back. I’ll get rid of the crime, so you’ll be able to walk down the street without getting shot. Right now, you walk down the street, you get shot.”




America’s once hustling and bustling inner cities are contracting in terms of economic productivity and in some cases population. Atlanta’s inner city war zone is not the only city dealing with death and destruction, which raises our eyebrow because children who are suffering from war zone PTSD is much more widespread than thought, making it an unrecognized national public health crisis. As per MSN, America’s most dangerous inner cities:


  • DETROIT, MICHIGAN: Violent crime rate: 2,047 per 100,000

  • ST. LOUIS, MISSOURI: Violent crime rate: 1,913 per 100,000

  • MEMPHIS, TENNESSEE: Violent crime rate: 1,820 per 100,000

  • BALTIMORE, MARYLAND: Violent crime rate: 1,780 per 100,000

  • ROCKFORD, ILLINOIS: Violent crime rate: 1,659 per 100,000

  • KANSAS CITY, MISSOURI: Violent crime rate: 1,655 per 100,000

  • CLEVELAND, OHIO: Violent crime rate: 1,631 per 100,000

Like Alcoholics Anonymous, President Trump submitted the inner cities into America Anonymous, a 12 step program to get the country back on the right path. The first step is admitting there is a problem, which was completed in 2016, with eleven more steps to go, who said this was going to be an easy rebuild?


It’s time the American people awaken from their decades’ long sleep and learn the truth about the disastrous mistakes government has made in governing this country.


In the medium range, Americans will have to start stomaching the consequences of bad policies in the form of an entire generation of children who are suffering from PTSD and the ramifications surrounding brain development.









Tuesday, December 5, 2017

Government Shutdown Looms Amid Clash Over "Dreamers" Fate

In an announcement that will provide some measure of relief for T-bill traders and others who are skeptical about Republican lawmakers" ability to compromise with their Democratic colleagues, the Republican House leadership said Tuesday they would bring a stopgap bill to extend funding at its current levels - and preserve funding for a popular child health-care program - until Dec. 22. Otherwise, the current continuing resolution would expire on Friday, tilting the federal government into its first shutdown since 2013.


The compromise leaves much to be desired, however, and a workable, long-term spending compromise will unlikely be reached, which is making markets nervous. As we reported yesterday, the T-bill market has once again been under pressure, with the Dec 14 Bill the traders" focus for now:



Lawamakers" unwillingness to compromise on this bill, however, is due to one policy demand that Democrats have staked their political future on, but Republicans see as tantamount to amnesty: Enshrining DACA, or DREAM Act, protections into law.


The deal look ready to go in Setember when Trump annoounced he"d struck a deal with "Chuck and Nancy" to pass a continuing resolution in exchange for a series of Democratic compromises on imigration enforcement while Trump would fight to push Congress to authorize the DACA privileges. Trump had canceled an executive order granting those protections earlier this year.


However, a few weeks later, Trump went back on his word, proposing that the final legislation include funding for his border wall - something Democrats had never agreed to. Meanwhile, some Republicans have taken a hard line on the DACA protections, saying there"s "no way" they"d be included in a spending bill before the end of the year. More from Bloomberg:


John Cornyn of Texas, the Senate’s No. 2 Republican leader, said Monday that talks with Senate Democrats over combining new border security measures and deportation protections are at an impasse. Cornyn said he sees little chance for resolution before the year is over, pushing the matter into early 2018.


 


He also told reporters that “no way” would he back combining such a package with a must-pass year-end spending deal designed to keep the government open, a key demand of Democrats to get their needed support to move it through the Senate.


 


Speaking on the Senate floor, he accused Democrats of a “hysterical and cynical ploy” of threatening to trigger a shutdown over the matter. Republicans are angling for a two-week stop-gap measure to get past a Dec. 8 deadline when agency spending authority lapses, with the potential for a second such measure later in the month that extends into January. Democrats haven’t agreed to those terms.



Widening the divide, many powerful Democrats are demanding these protections be enshrined in law by the end of the year. 


Senator Richard Durbin of Illinois, the No. 2 Democratic leader, said later that he continues to insist that Congress act this year to address the needs of the young immigrants, brought to the U.S. by their parents when they were children. Their deportation protections were put in place by President Barack Obama and temporarily extended by Trump until early March. Ending them will affect 1,000 young people each day over two years if the deadline is reached, Durbin said.


 


“I want it done this year,” Durbin said. “This calendar year.”



At least one Republican who’s in favor of keeping the protections has said it’s possible they pass by the end f the year – just not as part of the bill to reauthorize spending.


The protection for the those covered by Obama’s Deferred Action for Childhood Arrivals program, or DACA, has been up in the air throughout the first year of Trump’s presidency. Trump in September agreed with Senate Minority Leader Chuck Schumer of New York and House Minority Leader Nancy Pelosi of California to move a border security bill by year’s end, and pair it with protections for the immigrants. He has since backed away from it.


 


A Senate Democratic aide familiar with the negotiations said that Republicans proposed a plan for a dramatic increase for border resources, some cuts to the number of legal immigrants and only temporary protections for the young immigrants. Durbin put forth a counter proposal with more modest border resources, combined with a permanent DACA fix and a pathway to citizenship for the immigrants.



Given the rancor these negotiations have instilled in both Democrats and Republicans, it’s also unlikely the two sides will be able to compromise on issues like preserving Obamacare subsidies, funding for Planned Parenthood and disaster relief spending.


For now, at least, Republicans have cobbled together a stopgap - though it"s still unclear if this will have the votes to pass the senate. The plan maintains the current federal spending levels but includes a provision to ensure that states are not forced to suspend the popular Children"s Health Insurance Program, which annually provides health insurance for nearly 9 million children in low-income families.


"This bill, one without any controversial policy riders, will continue government funding and give the House and Senate time to complete their work on a long-term solution," McConnell said on the Senate floor Monday.



"It will keep the government open and functional, and it includes critical resources for our national defense and to give states certainty to continue the Children"s Health Insurance Program while the bipartisan work on CHIP reauthorization continues," he added.


McConnell summarized the republican position best, noting that that Congress has until March before those covered by the Deferred Action for Childhood Arrivals (DACA) program lose protections from the program President Trump is ending.


“I don’t think the Democrats would be very smart to say they want to shut down the government over a nonemergency,” McConnell said on ABC’s “This Week.”


Of course, the Democrats will claim that it is an emergency, and certainly a worthy cause for government shutdown, just as Trump enjoyed his biggest legislative victory to date.


As the Hill pointed out, Pelosi and Schumer said in a statement accepting an invitation to meet at the White House on Thursday that a “bipartisan deal” could be found to pass the “DREAM Act along with tough border security measures.”


“There is a bipartisan path forward on all of these items,” the two said in the statement, which also emphasized the need to boost defense and nondefense spending and provide disaster relief.


* * *


Meanwhile, on Tuesday morning, as touched upon up top, the House Republican leadership said it was forging ahead with a stop-gap bill to keep the government funded through Dec. 22 and avoid a shutdown, despite a Monday night push from the conservative Freedom Caucus to move the date past Christmas. Lawmakers emerged from a House GOP conference meeting on Tuesday morning indicating that leaders are leaning toward a two-week continuing resolution (CR).


“Leadership is locked in on Dec. 22,” Freedom Caucus Rep. Andy Biggs (R-Ariz.) told The Hill.


The Freedom Caucus had protested the strategy and held up a vote on a motion to go conference with the Senate on tax legislation Monday night until they got assurances from leadership that they would consider a longer CR. But leaders appear to be sticking with their original plan.


* * *


Still, the question remains: How long can lawmakers keep doing this before they get tired of pretending they have some deal in the worlds, and realize that a permanent solution is impossible and usher in the first shutdown since 2013?









Dalio Confirms GOP Tax Plan "Good For Business", Bad For Democratic States

Confirming what many have suggested, the billionaire founder of the world"s largest hedge fund, warns in his latest letter to watch out for the effects of tax reform on migration, the fiscal conditions of affected states and cities, and an increased polarity in America.



Birdgewater"s Ray Dalio writes (via LinkedIn),


While we have talked a lot about the effects of growing wealth and opportunity disparities in America, we haven’t talked enough about the tax migration that is taking place because of growing differences in state and local tax rates. This tax migration issue is especially important to focus on now because of the expected elimination (under the new tax legislation) of the deductibility of state and local taxes (SALT) against federal income taxes.


The dynamic that I’m referring to is the inevitable and self-reinforcing process in which those high SALT locations that a) have big disparities in income and fiscal shortfalls and b) can neither cut their financial supports to the “have-nots” (because their conditions are already unacceptably low) nor raise taxes on the “haves” (because they will move due to tax rates) suffer from tax migration.


Of course, those low SALT locations with the opposite circumstances benefit from this migration.


The dynamic works as follows. As state and local tax rates and debts rise because there are shortfalls that can’t be narrowed, it is financially smart for high income taxpayers to escape these taxes and debt burdens by moving to lower tax and less indebted locations, so they do. As they do, property values decline, further raising the costs of staying in the high SALT location. In other words, the financial cost of being in one of those high tax locations equals the tax rate difference plus the property value decline, which can be substantial. Also, the reduced population of higher income and higher spending folks leads to reduced spending in these locations, which further depresses the high SALT economies. Also, the fiscal conditions of these locations suffer. Because both the remaining high income and low income folks are increasingly stressed and tend to blame the other, tensions rise, which makes these environments even more inhospitable, which further contributes to high income earners’ emigration. Realizing this, other locations increasingly appeal to the “haves” by offering tax incentives and creating environments in which they are more comfortable living with other “haves.” For these reasons, this “hollowing out” dynamic is self-reinforcing. Of course, the reverse is true in states that attack these rich tax migrants. This dynamic causes even greater polarity. Because the rich and the poor typically have different values, which are also reflected in different laws and different politics, it probably will make the polarity greater and conflicts even more intractable.


It appears to us that the expected new tax law that eliminates the state and local deductions against one’s federal income taxes will significantly contribute to this dynamic. Consider the fact that this change in SALT deductibility is one of the largest increased sources of revenue in the tax bill, accounting for nearly $1 trillion in new taxes over the next 10 years. In other words, it is expected that those people who stay in high tax states will pay nearly $1 trillion more to stay there. Of course, these changed rates will prompt more people in high SALT locations to consider moving. To the extent they do move, it would increasingly lead to more prosperous states that are occupied by, and cater to, more rich people and more depressed states that are occupied by, and cater to, more poor people, and increased polarity between them.


While we are talking about the tax migration, we see such location cost arbitrage motivated migrations happen all the time, so we should be well acquainted with them. For example, in New York City we saw migration from the Upper East Side to Downtown and then to Brooklyn brought about by cost arbitrages. Every area in the world has this sort of cost and desirability motivated migration going on constantly. Cost differences drive migrations that change the characters and costs of neighborhoods and happen in self-reinforcing ways until the cost differences change to make the newly hot neighborhoods expensive and other areas relatively cheap, so the immigration shifts to emigration.


Estimating the Impact of Cutting the SALT Deductions


We played around with the numbers to get a feel for the directions and the impacts of this, and we show our scratch pad estimates below. We will first show our very rough estimates of the impact of ending deductibility on state tax revenues and migration patterns. 


First, to summarize, we estimate that:



  • Ending SALT deductibility will result in a sizable increase in the effective tax rate faced by high earners in high tax states (3-5% for most making over $500,000), notable outbound migration of high income filers (we estimate 1-2.5% will leave for most states we looked at), and a hit to state tax revenues (around 1%). In our opinion, these numbers understate the impacts, especially for the highest taxpayers (who pay the most taxes), because it is the nominal level of dollars of increased taxes that matters more than percentages, and we don’t fully account for all the second- and third-order consequences previously mentioned. In terms of economic impact, we estimate that it is the present value of all future year tax differences (and other costs such as declining real estate values) that is the best gauge of the cost of staying, and these are very big numbers. As I just noted, the effects on property values and living conditions are not properly considered in our estimates. Already, without the SALT deductibility changes, some higher SALT states are experiencing notable outbound migration (shown further below), which is straining tax revenues and risks the strengthening of a downward spiral where states adjust by cutting spending/raising taxes, which encourages even more people to leave.




  • Still, the table below conveys a rough picture of where the vulnerabilities lie. It shows a) the existing marginal tax rate, b) the effective tax rate with the deduction, c) the effective increase in the tax rate due to the elimination of the deduction, d) that increase relative to the US average and e) relative to states they are likely to emigrate to (e.g., their neighbors), f) the estimated medium-term size of the migration as a percent of the high earning population,* g) the estimated number of high earners leaving, h) the lost tax revenue to the state, and i) that lost tax revenue relative to the total tax revenue of the state. To be clear, these are VERY IMPRECISE ESTIMATES. 




We looked at a number of factors to come up with our rough estimates, so we will show you some. 


While the previous table looks at the impact of migration on state budgets, below we show a simpler cut: our rough estimates of how relative incomes between states will change when people in high tax states get a greater tax increase than people in low tax states. The chart on the left shows the absolute levels in real per capita earnings by state versus the national average before and after the tax change. These numbers are adjusted by what the Bureau of Economic Analysis believes about relative price levels between states (trying to get at some measure of competitiveness). The chart on the right shows the net shift that occurs with the tax change. As you can see, states with both higher than average incomes and higher than average taxes (especially New York, Connecticut, New Jersey, and California) are most vulnerable by this measure.



The vulnerability of a state to tax emigration is also affected by tax revenue being concentrated in the hands of those high income earners who are most affected by the changes. This concentration is shown below for the states with the highest income taxes. 



For these states, the high earning taxpayers are a very small proportion of the population—from 0.5% of households in Vermont to 1.7% in DC and Connecticut. That means that it would take only a tiny percentage of the population to move to have a devastating effect on the state’s finances. Clearly, all of these states are very vulnerable.



The next two tables show the states where people have been leaving fastest from and going fastest to, and a number of influences on these movements, such as economic conditions and the tax burden. 



As you can see, everything points toward states like New York, Connecticut, New Jersey, California, and Illinois being the most vulnerable, and states like Florida, Texas, Nevada, Washington, and Arizona benefiting the most from this shift.


Our look at these states’ finances and their muni bond markets will follow in the next few days. 


P.S.


As for the effects of the budget changes, below we show where the money is expected to come from and where it is expected to go.



So, our big picture perspective is that, on the margin, the tax law changes are going to be significant and bad for high SALT locations and good for low SALT locations, and are going to be good for businesses and business owners (and hopefully those who the money trickles down to), so those businesses in low SALT states will get a double whammy benefit.









Monday, December 4, 2017

America"s Military-Industrial Addiction

Authored by JP Sottile via ConsortiumNews.com,


Polls show that Americans are tired of endless wars in faraway lands, but many cheer President Trump’s showering money on the Pentagon and its contractors, a paradox that President Eisenhower foresaw...



The Military-Industrial Complex has loomed over America ever since President Dwight D. Eisenhower warned of its growing influence during his prescient farewell address on Jan. 17, 1961. The Vietnam War followed shortly thereafter, and its bloody consequences cemented the image of the Military-Industrial Complex (MIC) as a faceless cadre of profit-seeking warmongers who’ve wrested control of the foreign policy. That was certainly borne out by the war’s utter senselessness … and by tales of profiteering by well-connected contractors like Brown & Root.


Over five decades, four major wars and a dozen-odd interventions later, we often talk about the Military-Industrial Complex as if we’re referring to a nefarious, flag-draped Death Star floating just beyond the reach of helpless Americans who’d generally prefer that war was not, as the great Gen. Smedley Darlington Butler aptly put it, little more than a money-making “racket.”


The feeling of powerlessness that the MIC engenders in “average Americans” makes a lot of sense if you just follow the money coming out of Capitol Hill. The Project on Government Oversight (POGO) tabulated all “defense-related spending” for both 2017 and 2018, and it hit nearly $1.1 trillion for each of the two years. The “defense-related” part is important because the annual National Defense Authorization Act, a.k.a. the defense budget, doesn’t fully account for all the various forms of national security spending that gets peppered around a half-dozen agencies.


It’s a phenomenon that noted Pentagon watchdog William Hartung has tracked for years. He recently dissected it into “no less than 10 categories of national security spending.” Amazingly only one of those is the actual Pentagon budget. The others include spending on wars, on homeland security, on military aid, on intelligence, on nukes, on recruitment, on veterans, on interest payments and on “other defense” — which includes “a number of flows of defense-related funding that go to agencies other than the Pentagon.”


Perhaps most amazingly, Hartung noted in TomDisptach that the inflation-adjusted “base” defense budgets of the last couple years is “higher than at the height of President Ronald Reagan’s massive buildup of the 1980s and is now nearing the post-World War II funding peak.” And that’s just the “base” budget, meaning the roughly $600 billion “defense-only” portion of the overall package. Like POGO, Hartung puts an annual price tag of nearly $1.1 trillion on the whole enchilada of military-related spending.


The MIC’s ‘Swamp Creatures’


To secure their share of this grandiloquent banquet, the defense industry’s lobbyists stampede Capitol Hill like well-heeled wildebeest, each jockeying for a plum position at the trough. This year, a robust collection of 208 defense companies spent $93,937,493 to deploy 728 “reported” lobbyists (apparently some go unreported) to feed this year’s trumped-up, $700 billion defense-only budget, according to OpenSecrets.org. Last year they spent $128,845,198 to secure their profitable pieces of the government pie.




The Pentagon, headquarters of the U.S. Defense Department, as viewed with the Potomac River and Washington, D.C., in the background. (Defense Department photo)



And this reliable yearly harvest, along with the revolving doors connecting defense contractors with Capitol Hill, K Street and the Pentagon, is why so many critics blame the masters of war behind the MIC for turning war into a cash machine.


But the cash machine is not confined to the Beltway. There are ATM branches around the country. Much in the way it lavishes Congress with lobbying largesse, the defense industry works hand-in-glove with the Pentagon to spread the appropriations around the nation. This “spread the wealth” strategy may be equally as important as the “inside the Beltway” lobbying that garners so much of our attention and disdain.


Just go to U.S. Department of Defense’s contract announcement webpage on any weekday to get a good sense of the “contracts valued at $7 million or more” that are “announced each business day at 5 p.m.” A recent survey of these “awards” found the usual suspects like Raytheon, Lockheed Martin and General Dynamics. The MIC was well-represented. But many millions of dollars were also “won” by companies most Americans have never heard of … like this sampling from one day at the end of October:


  • Longbow LLC, Orlando Florida, got $183,474,414 for radar electronic units with the stipulation that work will be performed in Orlando, Florida.

  • Gradkell Systems Inc., Huntsville, Alabama, got $75,000,000 for systems operations and maintenance at Fort Belvoir, Virginia

  • Dawson Federal Inc., San Antonio, Texas; and A&H-Ambica JV LLC, Livonia, Michigan; and Frontier Services Inc., Kansas City, Missouri, will share a $45,000,000 for repair and alternations for land ports of entry in North Dakota and Minnesota.

  • TRAX International Corp., Las Vegas, Nevada, got a $9,203,652 contract modification for non-personal test support services that will be performed in Yuma, Arizona, and Fort Greely, Alaska,

  • Railroad Construction Co. Inc., Paterson, New Jersey, got a $9,344,963 contract modification for base operations support services to be performed in Colts Neck, New Jersey.

  • Belleville Shoe Co., Belleville, Illinois, got $63,973,889 for hot-weather combat boots that will be made in Illinois.

  • American Apparel Inc., Selma, Alabama, got $48,411,186 for combat utility uniforms that will be made in Alabama.

  • National Industries for the Blind, Alexandria, Virginia, got a $12,884,595 contract modification to make and advanced combat helmet pad suspension system. The “locations of performance” are Virginia, Pennsylvania and North Carolina.

Sharing the Largesse


Clearly, the DoD is large enough, and smart enough, to award contracts to companies throughout the 50 states. Yes, it is a function of the sheer size or, more forebodingly, the utter “pervasiveness” of the military in American life. But it is also a strategy. And it’s a tactic readily apparent in a contract recently awarded to Raytheon.


On Oct. 31, 2017, they got a $29,455,672 contract modification for missions systems equipment; computing environment hardware; and software research, test and development. The modification stipulates that the work will spread around the country to “Portsmouth, Rhode Island (46 percent); Tewksbury, Massachusetts (36 percent); Marlboro, Massachusetts (6 percent); Port Hueneme, California (5 percent); San Diego, California (4 percent); and Bath, Maine (3 percent).”


Frankly, it’s a brilliant move that began in the Cold War. The more Congressional districts that got defense dollars, the more votes the defense budget was likely to receive on Capitol Hill. Over time, it evolved into its own underlying rationale for the budget.


As veteran journalist William Greider wrote in the Aug. 16, 1984 issue of Rolling Stone, “The entire political system, including liberals as well as conservatives, is held hostage by the politics of defense spending. Even the most well intentioned are captive to it. And this is a fundamental reason why the Pentagon budget is irrationally bloated and why America is mobilizing for war in a time of peace.”


The peace-time mobilization Greider referred to was the Reagan build-up that, as William Hartung noted, is currently being surpassed by America’s “War on Terror” binge. Then, as now … the US was at peace at home, meddling around the world and running up a huge bill in the process. And then, as now … the spending seems unstoppable.


And as an unnamed “arms-control lobbyist” told Grieder, “It’s a fact of life. I don’t see how you can ask members of Congress to vote against their own districts. If I were a member of Congress, I might vote that way, too.”


Essentially, members of Congress act as secondary lobbyists for the defense industry by making sure their constituents have a vested interest in seeing the defense budget is both robust and untouchable. But they are not alone. Because the states also reap what the Pentagon sows … and, in the wake of the massive post-9/11 splurge, they’ve begun quantifying the impact of defense spending on their economies. It helps them make their specific case for keeping the spigot open.


Enter the National Conference of State Legislatures (NCSL), which notes, or touts, that the Department of Defense (DoD) “operates more than 420 military installations in the 50 states, the District of Columbia, Guam and Puerto Rico.” Additionally, the NCSL is understandably impressed by a DoD analysis that found the department’s “$408 billion on payroll and contracts in Fiscal Year 2015” translated into “approximately 2.3 percent of U.S. gross domestic product (GDP).”


And they’ve become a clearinghouse for state governments’ economic impact studies of defense spending. Here’s a sampling of recent data compiled on the NSCL website:


  • In 2015, for example, military installations in North Carolinasupported 578,000 jobs, $34 billion in personal income and $66 billion in gross state product. This amounts to roughly 10 percent of the state’s overall economy.

  • In 2014, Coloradolawmakers appropriated $300,000 in state funds to examine the comprehensive value of military activities across the state’s seven major installations. The state Department of Military and Veterans Affairs released its study in May 2015, reporting a total economic impact of $27 billion.

  • Kentuckyhas also taken steps to measure military activity, releasing its fifth study in June 2016. The military spent approximately $12 billion in Kentucky during 2014-15. With 38,700 active duty and civilian employees, military employment exceeds the next largest state employer by more than 21,000 jobs.

  • In Michigan, for example, defense spending in Fiscal Year 2014 supported 105,000 jobs, added more than $9 billion in gross state product and created nearly $10 billion in personal income. A 2016 study sponsored by the Michigan Defense Center presents a statewide strategy to preserve Army and Air National Guard facilities following a future Base Realignment and Closure (BRAC) round as well as to attract new missions. 

Electoral Impact


But that’s not all. According to the DoD study cited above, the biggest recipients of DoD dollars are (in order): Virginia, California, Texas, Maryland and Florida. And among the top 18 host states for military bases, electorally important states like California, Florida and Texas lead the nation.




President Trump speaking at a Cabinet meeting on Nov. 1, 2017, with Secretary of State Rex Tillerson to Trump’s right and son-in-law Jared Kushner seated in the background. (Screen shot from whitehouse.gov)



And that’s the real rub … this has an electoral impact. Because the constituency for defense spending isn’t just the 1 percent percent of Americans who actively serve in the military or 7 percent of Americans who’ve served sometime in their lives, but it is also the millions of Americans who directly or indirectly make a living off of the “defense-related” largesse that passes through the Pentagon like grass through a goose.


It’s a dirty little secret that Donald Trump exploited throughout the 2016 presidential campaign. Somehow, he was able to criticize wasting money on foreign wars and the neoconservative interventionism of the Bushes, the neoliberal interventionism of Hillary Clinton, and, at the same time, moan endlessly about the “depleted” military despite “years of record-high spending.” He went on to promise a massive increase in the defense budget, a massive increase in naval construction and a huge nuclear arsenal.


And, much to the approval of many Americans, he’s delivered. A Morning Consult/Politico poll showed increased defense spending was the most popular among a variety of spending priorities presented to voters … even as voters express trepidation about the coming of another war. A pair of NBC News/Survey Monkey polls found that 76 percent of Americans are “worried” the United States “will become engaged in a major war in the next four years” and only 25 percent want America to become “more active” in world affairs.


More to the point, only 20 percent of Americans wanted to increase the troop level in Afghanistan after Trump’s stay-the-course speech in August, but Gallup’s three decade-long tracking poll found that the belief the U.S. spends “too little” on defense is at its highest point (37 percent) since it spiked after 9/11 (41 percent). The previous highpoint was 51 percent in 1981 when Ronald Reagan was elected in no small part on the promise of a major build-up.


So, if Americans generally don’t support wars or engagement in the world, why do they seem to reflexively support massive military budgets?


Frankly, look no further than Trump’s mantra of “jobs, jobs, jobs.” He says it when he lords over the sale of weapon systems to foreign powers or he visits a naval shipyard or goes to one of his post-election rallies to proclaim to “We’re building up our military like never before.” Frankly, he’s giving the people what they want. Although they may be war-weary, they’ve not tired of the dispersal system that Greider wrote about during Reagan’s big spree.


Ultimately, it means that the dreaded Military-Industrial Complex isn’t just a shadowy cabal manipulating policies against the will of the American people. Nor is the “racket” exclusive to an elite group of Deep State swamp things. Instead, the military and the vast economic network it feeds presents a far more “complex” issue that involves millions of self-interested Americans in much the way Eisenhower predicted, but few are willing to truly forsake.









Trump"s Tax Cut - FDR Would Be Envious

Authored by Tom Luongo,


The first rule of politics is feather your own nest.  President Trump’s tax cut proposal always had this in mind.



Congress has passed a bill which tinkers at the edges but leaves most of Trump’s core proposal intact.  It’s obvious to me that Trump has the political acumen of another brilliant U.S. politician, the loathsome Franklin Delano Roosevelt.


Yeah, I’m not a fan of FDR.  But I do respect his political skill in the same way I respect the way sharks hunt their prey.


FDR repackaged Herbert Hoover’s Works Progress Administration as “The New Deal” which set him on a course of near perpetual re-election thanks to the wealth redistribution it engendered.


Am I saying the New Deal was nothing more than a vote-buying scheme?  Yeah, pretty much.  FDR knew that politicizing the Supreme Court and pushing the New Deal, even if he did it for the right reasons, would reshape the Federal election landscape for generations.


Trump’s tax plan will have similar effects.  And it’s why there was such staunch opposition to it in Congress.


Democratic leadership understand that the triple-whammy of eliminating the State and Local Tax exemption, lowering corporate tax rate to 20% and incentivizing the on-shoring of corporate profits held overseas will gut their support at the electoral college level.


Why?


Mr. Trump, Tear Down that Blue Wall!


The incentives are now aligned to accelerate the exodus of workers and businesses from high tax, high-regulation states like New York, New Jersey, Illinois and California to low-tax, lower regulation states like Florida, Georgia, Tennessee and Texas.


In other words the Blue Wall will crumble.


The bill is not 48 hours old and already the mainstream media is trying to tell us how horrible this is.  From CBS News via MSN.com comes a four-way case study of taxpayers under the new law, in three of their four case studies taxes drop significantly.  In one they try and scare old people about how their health insurance costs will rise.


But, in gutting Obamacare, everyone’s health care costs are going to fall, so….


In that one case, John and Maya their “Married Couple with Two Kids” become the “Married Couple with One Kid from New Jersey,” does the taxpayer get the shaft.


The whole article is a mess of gamesmanship.  A married couple with 1 kid making a combined $71,000 should not be living in a $600,000 house!


In New Jersey!


Putting 10% of their income into their 401k!


Do they eat dirt?


That version of John and Maya doesn’t exist.  And if they do, they shouldn’t. And the tax code should not be gamed to allow them to do so, because then it’s a tax subsidy from the self-employed to the fake middle class.


In fact, another benefit of this tax code will be the bursting of over-priced middle class real estate in high-tax states as John and Maya face financial reality.


In software parlance, that’s not a bug, it’s a feature.  It’s called political retribution.


In the current market John and Maya are better off selling their house, taking the equity, buying a nice house in a secondary market in Florida or Alabama and living mortgage free or nearly so while building new careers locally.


They could practically live on the child and EIC while working at Home Depot, thanks to 1) the increased exemptions for lower-income workers and 2) local construction will be booming.


Bringing Home the Bacon


Turning to the onshoring of corporate profits.  All of that capital returning from overseas to invest in infrastructure and production won’t go to the big ‘Blue Wall’ states like New Jersey but to the new production belt in places like Chattanooga.


That’s where the jobs will be and that’s where the people will gravitate.  Moreover, the effect I just described for John and Maya will become an epidemic in places like L.A. (where Hollywood will be getting smaller) and Seattle (software development is moving towards blockchain).


These people will see their overall tax bill rise unless they make the rational choice to sell their over-valued property to some European or Chinese ‘investor’ looking to flee economic chaos locally, pocket the profit and cut their tax bill in half.


Congress’ Joint Commission on Taxes severely low-balled the amount of capital U.S. firms will repatriate.  According to this article by Larry Kudlow (not normally someone I would quote, but here he’s rational), the JCT estimated just $500 billion out of $3 trillion in offshore corporate profits will come home over 3 years.


And then they said 1-2% growth, which, with a tax structure like this, is a low ball.  The JCT’s own rate of estimated repatriation ($280 billion in 2018) alone would add more than 1% to GDP as corporate savings is added to Gross National Spending.  So, spare me the class-warfare histrionics.


This is mainly how they came to conclude the tax bill would cost us $1.4 trillion over ten years.  That’s $140 billion a year.  Surely, 1) we can cut spending by that much and 2) we waste ten times that in off-budget wars and subsidies every year.


There’s plenty of room to cover the ‘costs’ of this tax cut.


The FOMO Trade


The tax bill itself will make the U.S. more competitive than the sclerotic social welfare states in Europe and Japan.  Capital flight into U.S. real estate as a safe-haven play will keep demand up as Americans migrate away from the taxes and Europeans and Asians flee currency devaluation and bursting debt bubbles.


The old tax system was designed to make us competitive with Europe.  In other words, normalizing our tax system with theirs while we still pay for their defense, the U.N. and bear the burden of the world’s reserve currency and all the issues of Triffin’s paradox that entails.


In short, the tax code was designed to redistribute America’s wealth around the world in pure Marxist style.  Raise our costs instead of forcing them to lower theirs.


In fact, this tax bill will only accelerate those processes already underway. The Dow is making new highs while the German DAX is struggling.


That fire under the Dow Jones and the cryptocurrency markets is only just beginning as the middle class is freed from the yoke of Obamacare to begin taking part in the current runaway bull markets.


This year’s tax refunds will fuel a whole lotta FOMO, folks.


A Good Start


The tax cut bill moving through Congress now is by no means perfect.  Eliminating income taxes is the ideal. But, that’s not possible so in evaluating it I’m looking for whether it solves the big problem, namely the incentives to push capital out of the U.S.


It does this.


Lowering the corporate tax rate alone is a major win for Trump.  Yes, personal tax rates need to go down.  Yes, a lot more work needs to be done for small entrepreneurs and the self-employed who are still massively disadvantaged by the code.  But, this bill is a major step in the right direction of reversing the flow of real wealth and incentivizing it to stay onshore.


Don’t let the Michael Moore’s of the world influence you one whit.  That man has nine houses and is a multi-millionaire.  He’s also a fat, stupid hypocrite and an economic ignoramus.  Fix the business environment first.  Invite capital back onshore.  Get U.S. corporates spending at home.


Meanwhile Ted Cruz, Rand Paul and the incoming freshman class of MAGA guys can amend this bill to make it even better for the middle class.  In Hollywood terms, they can fix this in post-production.


The cuts that Trump has ordered to the cabinet departments will begin having the biggest impact in the second half of his term.


The capital flight I just described will add to the mix, and for a short time, the U.S. will likely see an economic boom it hasn’t seen since the days of Volcker, Stockman and Reagan.  And that, my friends, is what the Democrats truly fear, a 2020 election that puts Kamala Harris into the role of Walter Mondale.


FDR would be proud.









Saturday, December 2, 2017

Chicago Cop Caught On Video Telling Teen He"s Being Detained "Because You"re White"

A police detective in Illinois has faced disciplinary action this week, after he was recorded on video telling a teenager he was being detained because he’s white.


Footage of the controversial encounter surfaced on Facebook on Monday, and has since gone viral with more than 85,000 views.



Dezi Baczek,18, who recorded the video, was among a group of teens who went to the local pawnshop in Lake Villa, a suburb of Chicago, to sell an ‘item’ so the group could buy her brother a book that he wanted to read…How thoughtful…


When the group of millennials exited the shop, they found Detective Gomez waiting out in the parking lot for them. Immediately, the group of teens were ordered to sit down or face being arrested. 


Baczek told NBC 5, “I was yelled at to sit down”.



When asked ‘what for?.. That is when she started filming.


Police said the detective was conducting a theft investigation at the time and was questioning the group of teens. One unseen teen in the video questions why he’s being detained— he asked Gomez, “Is it because I’m a teenager? Because I have baggy pants on?”


Detective Gomez was seen storming off, then spun around and yelled back, ”because you’re white."



In response to the incident,  Lake Villa Police Chief Craig Somerville said such behavior will not be tolerated, said the Daily Herald.


“We are a professional department with high standards and we value our relationship with the public, particularly our youth,” Somerville said in a statement.


 


“Our relationships are built upon mutual understanding and trust and this type of behavior contradicts that.”



Somerville said Gomez became suspicious of the group when they were accompanied by the suspect of a theft investigation at the pawn shop and another member gave officers a fake name. That person was charged with obstructing police.


The chief did not directly acknowledge what was said in the video, but he did note it as inappropriate and unprofessional.


Somerville said in a statement, “Gomez admitted his words were poorly chosen and insensitive and he immediately regretted what he had said. The Lake Villa Police Department does not condone this type of behavior of its officers.Gomez has been disciplined for behavior unbecoming an officer. He will be assisting me with speaking to the parents and teens involved in this incident.”









Friday, December 1, 2017

Mapping The United States Of Welfare

Via HowMuch.net,


When was the last time you stopped to think about how much the government spends on welfare?


Most people probably don’t think about it too much, but we bet even for those who do, they don’t know how much their government spends, much less what the money actually pays for.


That’s why we created a new map showing you how much each state spends on the public dole.



Source: HowMuch.net


Our viz takes U.S. Census Bureau data from GoBankingRates to create a map for the entire country. Each bubble represents a state, and the size of the bubble corresponds to the size of the public expenditure on public welfare. We then color-coded each circle according to the size of the expense. Shades of blue mean that the state spends relatively little money, but pink and red indicate a higher-than-average amount. There’s a lot that you can quickly learn by breaking mapping public welfare expenses in this war.


First off, what is public welfare? This can be a controversial topic with a lot of stereotypes, so let’s get our definitions straight. If you rely on public welfare, then you turn to the government for help with paying your basic necessities, like food, housing and healthcare. The federal government runs programs that provide these types of things, and to varying degrees, so do some states. As you can clearly see, some places are more generous than others.


California is the obvious standout on the West Coast, dropping north of $100 billion on public assistance. Texas is the only other Western state with over $30 billion of expenditures, followed by Washington at under $12 billion.


There’s a significant cluster of high-spending states across the Northeast, including New York ($61.4B) and Pennsylvania ($26.8B). Florida stands out in the South at over $27B, thanks in large part to its retirement communities. There’s also a cluster of states in the Upper Midwest in light pink, where there a lot of old manufacturing cities.


We should also point out the states with much smaller expenditures, stretching across the Midwest and into the deep South. The simplest explanation for the lack of huge welfare budgets in these states has to do with geography: there just aren’t a lot of big cities in places like Iowa and Alabama compared to other states. This helps explain why California and New York spend so much on welfare. They rank first and fourth as the most populous states.


Here’s a straightforward list of the top ten states with the highest expenditures on public welfare. Note the enormous difference between California and New York and the rest of the country.


1. California - $103 Billion


2. New York - $61.4 Billion 


3. Texas - $35.4 Billion 


4. Florida - $27.2 Billion 


5. Pennsylvania - $26.7 Billion 


6. Illinois - $21 Billion 


7. Ohio - $20 Billion 


8. Massachusetts - $18.6 Billion 


9. New Jersey - $17.3 Billion 


10. Michigan - $16.3 Billion 



Here’s an interesting fact for you. The top ten states listed above spend more on public welfare ($346.9B) than all of the bottom forty states (plus the District of Columbia) combined ($262.7B). 


Regardless of how populated any particular state is, you want to pay attention to these numbers because they foreshadow future budget problems.


When you consider the fact that many states run operating deficits and have enormous debt problems, you begin to wonder if some of these numbers are sustainable for the long term.