The hand is writing is on the wall. Both Cuomo’s NY and Brown’s CA liberal feasts will soon end, along with the other prodigal governors’ feasts.
The scales have been irreparably tipped. The eleven “Death Spiral” States are described in Forbes and Zero Hedge as in irreversible taker/maker ratios, but those ratios fail to include, with the takers, the large “guilt-ridden/Progressive/Marxist” populations in many of those States. South Carolina, Alabama, Kentucky and Mississippi will get lower ranks compared to New York, California, Illinois, Maine, Hawaii and New Mexico with the guilt-ridden factored in. The large guilt-ridden ideologue populations make reform and change impossible. The guilt-ridden among the idle rich in those States need their muni-bonds to avoid the large income taxes which are inflicted on the producers.
An unavoidable fiscal cliff faces all of them as described in my prior posts.
1. Even worse in New York, California, Illinois, Maine, Hawaii or New Mexico, these cabals of government workers, takers and the guilt-ridden would block any reforms required to fix the massive pension underfunding as described in my prior posts above.
2. Raising taxes after a certain point doesn’t raise revenue, it decreases it. link
3. There is a net outflow of taxpayers out of high tax States. Escape From New York? High-Taxing Empire State Loses 3.4 Million Residents in 10 Years
4. These states forgot to fund future retiree health benefits as will be required under Obamacare.
5. These states also have huge new Medicaid spending expenses under Obamacare, in addition to their already increasing expenditures.
So, New York, California, Illinois, Maine, Hawaii and New Mexico had impossible delusions for their compassionate spending. Obamacare is greasing the death spiral tracks. While the takers in those States are winning now, at the end of a death spiral there will be no prizes. Note to the idle rich bondholders in those States: when interest rates rise, your bond fund’s price and your nominal wealth falls proportionally. Obamacare will become the ultimate free lunch lesson. Whither Cuomo?