The 11 worst states fiscally speaking

Wiseacre

Retired USAF Chief
Apr 8, 2011
6,025
1,298
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San Antonio, TX
A few days ago Bill Baldwin wrote a piece in Forbes magazine about the 11 worst states to buy a home or invest in, by virtue of being in a financial death spiral. Do you live on one of these states?

New Mexico
Mississippi
California
Alabama
Maine
NY
South Carolina
Kentucky
Illinois
Hawaii
Ohio

snippet:

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.

The taker count is the number of state and local government workers plus the number of people on Medicaid plus 1 for each $100,000 of unfunded pension liabilities. Sources: the Bureau of Labor Statistics, the Kaiser Commission on Medicaid and a study of state worker pensions done in 2009 by two academics, Joshua Rauh and Rovert Novy-Marx. Professor Rauh estimates that the shortage in pension funding is on average a third higher today.

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 focuses more on dollars than body counts. Its formula downgrades states for large debts, an uncompetitive business climate, weak home prices and bad trends in employment.

Conning rates North Dakota the safest state to lend money to, Connecticut the most hazardous. A state qualifies for the Forbes death spiral list if its taker/maker ratio exceeds 1.0 and it resides in the bottom half of Conning’s ranking.

Do You Live In A Death Spiral State? - Forbes
 
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I do live in the No. 1 worst state on that list:New Mexico. I did most of my growing up here, was away for a long period, but have been back now for 28 years. Fairly low in population for a state that is fifth largest in land area in the country, we have one of the nation's most diverse populations with 'anglos"--(Anybody who is not Native American, black, Asian, Hispanic, or Italian is called 'anglo' here regardless of where they were born)--being in the minority at about 40% of the population. Our population was pretty stagnant for some time until last year when it surged about 2%--we think due to all the illegals escaping Arizona. We have a very high foreign born population here.

Not only are we saturated with government employees at all levels, but we have a significantly larger number of people living below the poverty threshhold than the national average. We have a higher home ownership ratio than the national average but in most social factors such as education, graduation rates, people with higher education degrees, life expectancy, we hover at or near the bottom. At 6.3% unemployment, we are below the national average but some theorize this is due to an increase of people going on welfare or an increase in government jobs. We have a pretty unfriendly business environment here.

Our bright, energetic, smart young governor is making some positive changes, but she can only do so much with a solidly leftwing and pro-federal government state legislature. New Mexico has never had a Republican controlled legislature in the history of the state.

Even with all the negatives, however, New Mexico has much to commend it and it is possible to achieve the American dream here. Despite a fairly high crime rate for a small state--mostly from our high percentage of people here illegally and vigorous drug trafficking--traditional values are still important here. I attribute that to a high percentage of church going Christians with the majority of those being Catholic. It does have a tempering influence.
 

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