If Takers Outnumber Makers, Stay Away

Do not buy a home, a municipal bond, or invest capital in a state where private sector workers are outnumbered by people who receive government funds, whether as a government employee (local, state or federal) or recipient of Social Security or welfare, says William Baldwin in Forbes. Dividing the states between takers—receives government funds—and makers—private employees, he lists 11 he terms “death spiral states” that will see a rising tax burden, deteriorating state finances, and private employers moving out. Takers include California, Illinois, Connecticut, Hawaii, New York, New Mexico, and Ohio. In California 100 makers support 139 takers. In Ohio the ratio is one to one. New Mexico has 1.53 takers for every maker. Conversely, in Texas 100 private employees support only 82 takers. The other consideration in the death spiral formula is a state’s credit-worthiness, based on large debts, weak home sales, uncompetitive business climate, and poor employment trends. As MHProNews has learned, it is better to rent than buy a home in those states, and not a good risk to buy municipal bonds there either. California spends $10 billion annually on entitlements for illegal aliens, and has an array of civil servants required to administer funding of the various programs. Illinois has $66 billion to cover pension obligations of $233 billion. North Dakota, Nebraska and Virginia are less likely to devolve into an economic tailspin.

(Image credit: Forbes)

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