Friday, November 30, 2012

Forbes: Mississippi is in a death spiral

Forbes magazine published a list of "death spiral" states. Such a state is considered to be in a death spiral if the number of people receiving income from the government is more than the number of people receiving income from the private sector.



Forbes reported: 

" The state ranks second to worst on the list of states burdened by a high ratio of takers (welfare recipients and state employees) to makers (private sector workers)." Article

Mississippi's ratio was 1.49.  It continued:

"Don’t buy a house in a state where private sector workers are outnumbered by folks dependent on government.

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.

Let us give those takers the benefit of our sympathy and assume that every single one of them is a deserving soul. This person is either genuinely needy or a dedicated public servant or the recipient of a well-earned pension.

But what happens when these needy types outnumber the providers? Taxes get too high. Prosperous citizens decamp. Employers decamp. That just 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.

Ranked on the taker/maker ratio, our 11 death spiral states range from New Mexico, with 1.53 takers for every maker, down to Ohio, with a 1-to-1 ratio
."

KF note: Very simplistic. Ignores factors such as unions, cost of living, taxes, regulations, and education.

31 comments:

Anonymous said...

Saw this article a few days ago, very interesting albeit pretty sobering. I'm curious though - what does your final note imply? That these other factors (unions, cost of living, taxes, regulations, education) increase, or decrease, the likelihood of a "death spiral" for Mississippi versus some of the other states on the list?

Anonymous said...

Only a fool would invest in any Jackson debt. Nothing too simplistic about that.

Kingfish said...

Yet how many House Republicans, and Jeff Smith tried to keep the bond debt at last year's levels instead of paying it down?

Anonymous said...

If Forbes is going to put state workers in with the "takers" then the members of the House and Senate along with all State wide elected folks need to be at the top of the "taker" list. It is really silly to put hard working folks like most state workers in the "taker" category.

Anonymous said...

PERS is "taker" to the core.

Burke said...

I once subscribed to Forbes, but it is a one-trick pony: smug pandering to the wealthy. Of course, smug pandering can be found in all quarters. As I have said before, our beloved Kingfish is an exception; he certainly doesn't pander, and is rarely smug.

Anonymous said...

Mississippi ranks first in dollar amounts received from DC, according to the 24/7 Wall Street website:
-Mississippi receives 49.6% of its revenue from the federal government, more than any other state in America according to new analysis from the Pew Center on the States. Our dependence is greater than Louisiana (48.0%) and Arizona (46.9%), and almost double the proportion that New Jersey and Connecticut receive from the federal government.
Since the recession, the federal government has provided $1 out of every $3 of state revenue on average across the country. This data reveals just how dependent state governments have become on the federal government for revenue.-

Add to that the high rate of failure of Haley Barbour's economic development projects, and the continuing ignorant statements of the current governor related to "satan" and the personhood fiasco, now the teenage pregnancy comments about contraception, and it is easy to see that the future here looks about as bad as anywhere in America. Lets all keep praying that it will improve.

Anonymous said...

The key difference between Mississippi and the other states listed is political ideology. Mississippians are deeply opposed to higher taxation and larger government, so the transfer payments to our takers principally come from the federal government.

I don't see this changing soon, particularly since we have almost no "rich" to tax. A California-style death spiral requires you to have enough big revenue generators to cannibalize for many years, so as to give people the illusion that lavish public spending is the norm. That will never be the case in Mississippi. Plus, people who want that will tend to go where it already exists.

In short, Mississippi will never be great, but it will never collapse under its own weight, either.

PittPanther said...

10:52AM, perhaps along with prayer, a plan of action would be useful.

PittPanther said...

2:05PM, interesting comment, but it's not as if MS was the only "conservative" state on the list. Alabama, Kentucky, South Carolina, and Ohio are also on the list, and are also "deeply opposed to taxation and large government."

Another way to interpret things is that because California has many more revenue generators than MS, then indeed MS will collapse much sooner than CA. MS ends up being nothing but Local, State and Federal government workers, hospital employees, and those who receive assistance of some type (whether that is SSI, disability, Section 8, whatever).

Can the employees of UMMC, et al, fund the entire state?

Anonymous said...

You're right 3:30 pm

Worse yet, is that few of the wealthy in this state know what percentage of their income is from those federal dollars being spent in the economy by those who either work for the government,have salaries subsidized by the government, contract with the government or who receive government funds from grants.

Those federal dollars get circulated in our economy.

So, it's not just how many get money, it's where the money goes next.






Anonymous said...

ah yes...the scale has tipped...more of "them" than there are of "us"...I am real sorry, but I don't remember asking ANYONE to be a "state worker" or whatever...I can't remember where it is written just because someone to damn lazy or stupid to make it in the private sector, the rest of us OWE them a living?

Anonymous said...

To 9:56, what else would you call a government employee? I'll make it simple (because I have to) and use simple numbers. It takes 10 private workers earning 100k a year to support 1 MS state worker 'earning' 50k in pay and benefits. Here you go, at 5% income tax you take in 5,000 from the private worker, X 10 gives you the pay/bennies for 1 state 'worker'. Also, there is sales tax, fees etc, but you get the drift. EVERY Penny for a State/Fed 'worker' is taken from the private sector so the less you have in private worker numbers the more you have to TAKE to support them. Think about it, what agency or state function would you go out and purchase if you had a choice? Jackson Public School? MDOT vs Toll roads? TSA at the airport (have you every had the chance to fly at a private airport without TSA? Florida has a few and they are a joy and function better, cheaper, and safer), Health Dept? Or any Jackson city agency. You get the drift. The only way the gov can survive is to FORCE you to use their services, ie the future hellcare system.

Anonymous said...

My wife is a government employee, and she doesn't take anything. She is good at what she does and earns every dollar she makes. The notion that anyone who works for a living is a "taker" is offensive. Under that logic, if you don't own the business, you are a taker, even in the private sector.

Anonymous said...

12:12 am It takes 11% of a $50000 net income to pay for BCBS plus the deductible and average co-pay if the earner is not part of a health care pool but pays as an individual.

The average salary in MS for a government employee is $29,533.39 according to census records not $50000 and in all of MS 218,186 people work for state or local government full time and 39,792 part-time.

Just as we get protection from the costs of catastrophic medical costs by paying health insurance, we pay for protection in the event of fire and from criminals by paying taxes. We don't have to hire a tutor to teach our children. We get water and sewer and roads and bridges and we get a justice system.

The bottom line is that if we work together as a community and pool our resources , we get more than if we do it by ourselves. We have highways now rather than dirt roads for that reason. We also have decided that the contribution should be proportional to the income and that those who have the most, have the most to lose if our government fails.

Here's a good example...it was well worth it to the wealthy to pony up once they realized the rats and fleas that infested the poor areas were carrying the bubonic plague and making the wealthy sick as well. It didn't matter if the personal habits of the poor encouraged rat infestation, or the merchantile trade brought the plagued rats in. The important thing was to deal with the plague, not assign blame.

See, I think I ultimately benefit from living in a community of healthy people with good educations. I don't think life is all about me and my wants and needs, but that I'm a part of a community ,state and nation and a civilization that I want to succeed and improve. I see myself as a small grain of sand in the history of mankind, not the center of a universe.

Anonymous said...

12:12 I'll make it simpler. Compare two workers who make $100,000 per year, and pay 20% of their income in taxes (5% to the state). One works in the private sector, the other works for the state government.

The first one must generate $100,000 of new wealth to get paid, and the net gain to the state government from their employment is $5000. The second one does not generate any new wealth, and takes $100,000 year from the state, resulting in a net loss to the state treasury of $95,000 (of which $15,000 now goes to the IRS).

Certain essential services must be paid for by the government, and everything outside of that is a choice made by people's elected representatives.

Anonymous said...

To 8:40, so you are saying the bubonic plague was ended by taxes? Typical the 'government ' solves all. Actually, it was ended by the black rats dying and sick people developing resistance, and to some extent antibiotics. But nothing to do with increased taxes or government. And 'pooling' our resources to do what? Maybe a parkway in madison that certain people pay politicians for and stick the taxpayer with the bill? That is what happens when 'smart' people use other peoples money, ie taxes and politicians. Socialize risk over people who do not think it is good idea. "Education" ? Have you seen the infrastructure in people and buildings to maintain the F in Canton MS? I for one would rather have a real pool than put my money in that pool, but nooooo we have to have the 'common good' and put in an astroplay turf, a 10 million dollar athletic complex at MCH (for a 4 best team too) and one in Germantown, what has that gotten us? A bunch of bumper stickers on vans bragging about their chil being whatever at whaterve middle school,
Since you don't think of your wants or needs, then give 100% and let me think of mine because the people using these funds are as stupid as you are and taking it with the threat of force or other wise no one would buy the product.

Anonymous said...

8:40 = pollyanna simpleton.

The bottom line is that if we work together as a community and pool our resources, we get more than if we do it by ourselves.

That explains the failure of the great re-distributionist experiment in shithole Jackson.

Shadow% said...

Besides 8:44 being full of shit, who among this group of blog sitters has not known for twenty or so years that transfer payments comprise over 49% of Mississippians' cash flow.

Anonymous said...

11:06 pm While taxes have been around since before the bubonic plague, and government monies were certainly spent in some parts of the world to deal with the plague , what I'm saying is 1) that the source of the plague, once discovered, couldn't be overcome without a community effort 2)the cramped poor areas, particularly around docks in London was the breeding ground for the plague in England and a blame game was played and the wealthy thought they could flee the plague and 3) the plague is an example of a problem that multiple contributions to its spread, no geographical boundaries and couldn't be addressed by individualism.

Anonymous said...

8:44 AM You seem to think wealth occurs in a bubble and economic prosperity happens when the wealthy build empires.

Do you think those in the private sector didn't receive educations and some , even government financial support in loans? Did Bill Gates come out of his mother's womb understanding computer code?

Do you think Henry Ford's assembly line would have been able to mass produce cars if only Henry and his family worked the line or if his assembly workers couldn't do their jobs on the line competently?

Are goods and services in the private sector not dependent on means of delivery ?

Do you really believe interstate commerce and international commerce would work well without rules and regulations and government negotiations?

You really ought to read more about economic history. There was a time when Carnegie, JP Morgan and Rockefeller ( all of whom shared your philosophy) managed to work together even buy a presidency, McKinley's. And, you might realize our country progressed economically only after their monopolies were broken up and Henry Ford defied the patent laws that at the time which had existed to protect the wealthy. In time, even Rockefeller saw the value of mass consumption as became wealthier since he retained stock in Standard Oil's break up companies like Chevron and Exxon. And, he saw the value to the economy of a healthy middle class.

Of course, if he had studied economic history, he might have seen the role played by guilds the creation of a middle class and how that brought economic prosperity long before Rockefeller was born.

I'm perfectly happy to pay more and I'm in the upper 1%. I know some of it will be wasted. I'm not satisfied with the current public school system in MS. But, I'm looking for ways to improve it . I know public education can work. It does work in some states. It worked in the past.

Yes, we've created a system of dependency. But, you want to punish those who are dependent and I want to teach them a new way of looking at their future. Some of them might learn to swim if you throw them in the lake, but I think teaching them to swim is smarter and the lake won't be polluted with dead bodies and those who crawl to shore won't be ready to murder you!


Anonymous said...

There is a problem with liberal progressive thinking that does just one thing: provide justification. That problem is the continued mantra of "the ends justifies the means". I'll sarcastically suggest that Carnegie, Morgan and Rockefeller were instrumental in the growth of this country because we would not have the infrastructure to grow without them. Their monopolistic handling of their affairs and the underhanded businesses practices are what laid the foundation for the boom. Using this "ends justifies the means" thinking, we should look for more monopolies and shady business dealings to get out of the recession, because it worked before.

Furthermore, I'll sarcastically suggest that this country's growth mostly came out of WWII and the fact that much of the industrialized world was blown up. The U.S. grew because we had the infrastructure in place to provide for the rebuilding of other nations after the war. So, we should just nuke all of the industrialized countries so that we may begin to provide goods to the rest of the world..... if the ends justify the means and all.

Anonymous said...

Your sarcasm is noted as well as your generalizations 10:09 am and your strange misunderstanding of which of us has an " end justifying the means" point of view.

I suppose you think the infrastructure was built by the financiers and that they,for example, designed, engineered and dug the Panama Canal all by their lonesomes.

And, I suppose you think it impossible to have built the canal with adequate wages and compensation for those who died .

So, do you think there would be a Max Factor or Revlon with only the wealthy women being able to afford cosmetics?

We built a consumer economy. Did you miss that?

Anonymous said...

you didn't build that

Anonymous said...

" We" refers to the US economy and we are all a part of that economy 7:29 am.

How we use our money, whether we spend it or invest it or save it or put it in the mattress, and how productive we are or aren't is a part of the entire economy.

Rockefeller didn't invent the oil rig. I'd like to have seen him start Standard Oil without it. Tell me how he'd build Standard Oil without rigs and riggers?

But,let's get more basic, if Carnegie, Rockefeller, and Morgan had had to cook their own food and wash and iron their own clothes in those days, they wouldn't have had time to build empires and had they shown up stinking to high heaven and emaciated, no one would have given them the time of day.

You probably think they also knew how to tyoe and wrote all their own contracts in between washing and changing the diapers of their children.

A doctor's diagnosis is often only as good as the lab technician who runs the tests and he isn't making money if someone isn't filing insurance for him.

And, sometimes, there's just plain luck involved. Rockefeller lived to be 97. He couldn't have built an empire if he'd died in the flu epidemic or gotten tuberculosis. How would things be different if he hadn't been hired as a bookeeper or if his first business partner, Maurice Clark had been a crook ?

If any of you think you " did it alone", you really need to do some soul searching.

















KaptKangaroo said...

All I hear is doublespeak for the fact "you didn't build it" means just what it says. To infer that we are a society built upon a history and distort the reality of "building in present times" as somehow less than what it is, is silly. However I would expect the intellectually and economically challenged liberals to try and whine their way to make their point.

Anonymous said...

The best part of December 3, 2012 8:57 AM's most recent pontification is all the white space at the end.

Anonymous said...

And, I would expect intellectually and economically challenged conservatives, to be self-centered and greedy...which is just as ridiculous as your " comeback", Kapt.

Bill Buckley is rolling in his grave.

I implied , I didn't infer. You inferred, but incorrectly.

I didn't whine, I stated facts. If you haven't figured out that life involves some good luck or that bad things happen to good people and truly believe that anyone acquires wealth in a vacuum, you are dense beyond belief.

Indeed, given the value of a dollar then compared to now, no business man operating in the present can accumulate the wealth Rockefeller accumulated. Being in the right time and in the right place is a factor as well.


"Building" in the present is no different from "building" in the past save for improved tools. There are still factors that make it easier or harder or impossible.

And, while many missed it on the climb, you might notice that once great wealth is accumulated, the wealthy become philanthropists. Why ever do you think that might be, Kapt? Why would they start to give away that which they worked so hard to acquire?






KaptKangaroo said...

Infer this, no take it for fact, you are confused and completely missed my point. But then you are arguing over infer, imply and Bill Buckley.

Anonymous said...

Grandma troll has an extreme case of Ladd Syndrome.

Anonymous said...

Kapt, 10:59 am

You can continue to hurl insults that aren't shutting me up and continue to try to make a political ploy that didn't work in a campaign into a philosophy but instead, why don't both of you share why you think Mississippi made this list?

Why has Mississippi's economy remained so stagnant and it's educational system remained at the bottom compared to other Southern states? No " liberals" have ever been running things here. You weren't infiltrated by " commies" during the 50s.

Why couldn't your universities meet the requirements for Phi Beta Kappa status for all those years?

Why, given this State's influence in the GOP fare better during the Nixon, Reagan and Bush administrations? Where were the political rewards for loyalty?





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