The Politics of the Blue State Bankruptcy

The fallout would hit beneficiary states hard, assuming that our government would realize that it needs to scale back spending ASAP. According to the most recent analysis by The Tax Foundation in 2005, California gets back $0.78 of every dollar it pays to the feds (ranking 9th on donating and 43rd on receiving), IL $0.75 (ranking 14th on donating, 45th on receiving), and NY $0.79 (ranking 5th on donating, 42nd on receiving).

http://www.visualeconomics.com/united-s ... x-dollars/
http://www.taxfoundation.org/files/ftsb ... 71016-.pdf

While I don't necessarily agree with the conclusion of this article, or the 2nd one below, it makes some interesting points:
http://www.scholarsandrogues.com/2011/0 ... -proposal/
California should secede from the Union: a semi-modest proposal
Posted on January 3, 2011

I was thinking about this problem when it occurred to me that I had seen some other interesting numbers on California’s tax situation. http://www.scholarsandrogues.com/2009/0 ... g-whimper/ As it turns out, Cali is what we call a “donor state”: they contribute more to the federal government than they get back in services. Specifically, Washington, DC only returns $0.78 for every dollar that California pays in taxes.

78 cents. Hmmm. So I grabbed my calculator and did some basic math. Using the latest available numbers, California is paying roughly $314 billion in federal taxes. They’re getting back approximately $245 billion. That’s on the order of a $69 billion loss.

Expressed another way, that’s the deficit California presently faces plus a tidy $41 billion surplus. Does anyone besides me see a financial incentive to revisit the state’s relationship with the federal government? More to the point, wouldn’t it be perfectly responsible for Gov. Brown and the state legislature to take up deliberations on the possibility of secession?

Some caveats are in order, I suspect. First, I’m abstracting a complex issue in order to suggest a point. Second, I’m no math and economics genius, so I invite those of you with better number skills to double-check my calculations.

http://www.scholarsandrogues.com/2009/0 ... g-whimper/

Notice, by the way, that there are only 17 giver states (15 of which voted for Obama), as opposed to 32 taker states (21 of which voted for McCain). Not that we’re counting.

Now, if we leave out the District of Columbia, which is something of a special case, a certain pattern emerges here. If we think in terms of Blue states and Red states, a lot more Red States are takers, and a lot more Blue states are givers. It’s not a perfect correspondence, but it’s still pretty compelling.

We can all speculate and pontificate on the “outrage” among those who seem to be worried about socialism or whatever under an Obama presidency, but we all know what this is about.

Federal Spending per Dollar of Federal Taxes by State (2005)

1. New Mexico $2.03
2. Mississippi $2.02
3. Alaska $1.84
4. Louisiana $1.78
5. West Virginia $1.76
6. North Dakota $1.68
7. Alabama $1.66
8. South Dakota $1.53
9. Kentucky $1.51
10. Virginia $1.51
11. Montana $1.47
12. Hawaii $1.44
13. Maine $1.41
14. Arkansas $1.41
15. Oklahoma $1.36
16. South Carolina $1.35
17. Missouri $1.32
19. Tennessee $1.27
20. Idaho $1.21
21. Arizona $1.19
22. Kansas $1.12
23. Wyoming $1.11
24. Iowa $1.10
25. Nebraska $1.10
26. Vermont $1.08
27. North Carolina $1.08
28. Pennsylvania $1.07
29. Utah $1.07
30. Indiana $1.05
31. Ohio $1.05
32. Georgia $1.01
33. Rhode Island $1.00
34. Florida $0.97
35. Texas $0.94
36. Oregon $0.93
37. Michigan $0.92
38. Washington $0.88
39. Wisconsin $0.86
40. Massachusetts $0.82
41. Colorado $0.81
42. New York $0.79
43. California $0.78
44. Delaware $0.77
45. Illinois $0.75
46. Minnesota $0.72
47. New Hampshire $0.71
48. Connecticut $0.69
49. Nevada $0.65
50. New Jersey $0.61
51. District of Columbia $5.55
21 of the 32 beneficiary states voted for McCain, only 1 of the 18 donor states. If we were truly heading toward socialism wouldn't those who take more vote for those politicians who make that happen and those who give more get tired of being taken advantage of and vote for those politicians who support keeping what you make? The results are opposite of what you'd expect, so it seems that socialism is not the answer. Poor money management/economic understanding? Greed?

So if CA declares bankruptcy, it'll be blamed on liberalism, when in fact, it's the conservative states that are sucking up the federal tax dollars - is that the fault of the federal government not spending wisely, or the conservative states not being self-sufficient?

Not Congress. http://www.sciencemag.org/content/331/6013/14.full
The Battle Over the 2011 Budget: What's at Stake for Research
Science 7 January 2011:
Vol. 331 no. 6013 pp. 14-15
DOI: 10.1126/science.331.6013.14

What's going on? The answer is that a federal budget process that has always been hideously complex has become even more fragmented. Congress is supposed to pass 12 separate appropriations bills to fund all branches of government by the start of the fiscal year on 1 October. That has happened less and less often in recent years, however. Instead, procrastinating legislators have adopted one or more short-term continuing resolutions (CRs), holding spending to current levels, before eventually wrapping several individual spending bills into something called an omnibus bill.

This year, even that hope-and-a-prayer approach couldn't get the job done.

While I firmly believe that forced socialization will never effectively work for a country, there voluntarily and legislatively needs to be more parity and fairness, or the working class will eventually revolt. No one is dealing with the continuing economic problems effectively. The wealthy are getting tax codes re-structured so they can hang onto, or make more of, their money and then slide it out of the country. Corporations are sending more jobs overseas and leaving more temp jobs here that aren't sustainable for families. Solutions: not talked about in-depth all that much, and I think it's because they won't be easy (eg impossible with the current control that Wall St and corporations have over our political "leaders"). Unless there is a massive fundamental shift in attitudes and efforts, we're in the crapper for a long-haul. Assuming that my crappy understanding of economics is even close to being right. These articles were enlightening for me, peruse at your leisure as you wish.

http://www.alternet.org/economy/149396/ ... ble?page=1
Is the Ruination of America Possible?
While the United States has suffered the worst recession in living memory, things have only gotten better for the wealthy.
January 5, 2011

Most Americans believe that a person should enjoy the full fruits of his or her labors, however abundant. In this light, taxation tends to be seen as an intrinsic evil. It is worth noting, however, that throughout the 1950's -- a decade for which American conservatives pretend to feel a harrowing sense of nostalgia -- the marginal tax rate for the wealthy was over 90 percent. Since 1982, however, it has come down by half. In the meantime, the average net worth of the richest 1 percent of Americans has doubled (to $18.5 million), while that of the poorest 40 percent has fallen by 63 percent (to $2,200). Thirty years ago, top U.S. executives made about 50 times the salary of their average employees. In 2007, the average worker would have had to toil for 1,100 years to earn what his CEO brought home between Christmas in Aspen and Christmas on St. Barthes.

We now live in a country in which the bottom 40 percent (120 million people) owns just 0.3 percent of the wealth. Data of this kind make one feel that one is participating in a vast psychological experiment: Just how much inequality can free people endure?

It is easy to understand why even the most generous person might be averse to paying taxes: Our legislative process has been hostage to short-term political interests and other perverse incentives for as long as anyone can remember. Consequently, our government wastes an extraordinary amount of money. It also seems uncontroversial to say that whatever can be best accomplished in the private sector should be. But I can't imagine that anyone seriously believes that the current level of wealth inequality in the United States is good and worth maintaining, or that our government's first priority should be to spare a privileged person like myself the slightest hardship as this once great nation falls into ruin.

And the ruination of the United States really does seem possible. It has been widely reported, for instance, that students in Shanghai far surpass our own in science, reading, and math. In fact, when compared to other countries, American students are now disconcertingly average (slightly below in math), where the average includes utopias like Kyrgyzstan, Azerbaijan, Albania, Kazakhstan, and Indonesia. Needless to say, most Americans have no choice but to send their children to terrible schools -- where they will learn the lesser part of nothing and emerge already beggared by a national debt now on course to reach $20 trillion.

American opposition to the "redistribution of wealth" has achieved the luster of a religious creed. The truth, however, is that everyone must favor the "redistribution of wealth" at some point. This relates directly to the issue of education: as the necessity of doing boring and dangerous work disappears -- whether because we have built better machines and infrastructure, or shipped our least desirable jobs overseas -- people need to be better educated so that they can apply themselves to more interesting work.

To make matters more difficult, Americans have made a religious fetish of something called "self-reliance." Most seem to think that while a person may not be responsible for the opportunities he gets in life, each is entirely responsible for what he makes of these opportunities. This is, without question, a false view of the human condition. Consider the biography of any "self-made" American, from Benjamin Franklin on down, and you will find that his success was entirely dependent on background conditions that he did not make, and of which he was a mere beneficiary. There is not a person on earth who chose his genome, or the country of his birth, or the political and economic conditions that prevailed at moments crucial to his progress. Consequently, no one is responsible for his intelligence, range of talents, or ability to do productive work.

http://www.alternet.org/economy/149405/ ... ing_poorer
10 Signs That Our Nation Is Becoming Poorer
The Working Poor Families Project has discovered that the number of working poor in the United States is higher than ever and it continues to increase at a staggering pace.
January 4, 2011

We are rapidly becoming a nation that will have a very small privileged class of ultra-wealthy and a very large class of "workers" that is just barely trying to survive.

So is the answer even more government handouts and even more government social programs?

Of course not.

What middle class Americans need are middle class jobs.

But as I have written about previously, the United States is rapidly bleeding middle class jobs with no end in sight.

Globalism has permanently changed the game. The middle class way of life that so many millions of Americans have been enjoying for so many decades is disappearing.

But instead of facing reality, our federal government, our state governments and our local governments just keep borrowing massive amounts of dollars to try to paper over all of our problems.

It is not going to work. Unless something is done to fix our structural economic problems, the economic decay is just going to get worse and all of this debt is eventually going to collapse our entire financial system.

http://www.alternet.org/economy/149234/ ... well-being
How and Why Working America Is Complicit in the Elite Assault on its Economic Well-Being
Sociologist Lisa Dodson examines what she terms the “economic disobedience” now pervasive in the low-wage sector.
January 3, 2011

Persistent high unemployment, rising poverty and shrinking state budgets have made insecurity the norm for America’s working class. Economic disobedience very much resonates with civil disobedience as part of American history. The forefront of that today is the issue of inequality. Where people feel provoked, they break a rule, bend a rule. It’s taking sides in a very private way. It’s not a mobilized effort yet, but it is a way people are confronting the incredible economic disparity in America today.

We may all have the right to vote now, and we may have laws that are supposed to protect workers, but the truth is that tens of millions of people are not being paid enough to take care of themselves or their kids. So this creates a really sharp paradox for fair-minded people, many of whom are not particularly interested in being advocates or activists. They just think that things ought to be fair. They think that if people work hard and do their job, they should be able to take care of themselves. But because the inequality built into the economy is so profound and so pervasive, people are committing economic disobedience.

The corrosive effects of protracted poverty—even when you’re working as hard as you can work—have a very negative effect on a society. It is not that people or families shouldn’t be responsible. People are extraordinarily responsible. But what about these economic structures? It is projected that 50 percent of all U.S. children will be members of low-income households.

http://www.alternet.org/economy/149412/ ... _democracy
Hightower: How Wall Street Elites Are Dynamiting Our Democracy
Our society can tolerate such raw selfishness by the privileged few, or it can have democracy. It can't have both.
January 6, 2011

Most politicos and economists, however, no longer want to be bothered with the fact that millions of our people are either unemployed or underemployed. Jobs, they say dismissively, are merely a "lagging economic indicator," a problem that'll take care of itself in the by and by. But jobs have been "lagging" for years now, and there's no sign that this problem will ever take care of itself. To the contrary, America's corporate elite have learned that they can prosper by deliberately holding the workaday majority in a new normal of job insecurity.

No one at the top wants to admit it, but big business has quietly been imposing a structural transformation on our economy, shifting from a workforce of permanent employees to one in which most jobs are temporary, scarce, low-paid, without benefits and with no upward mobility. Of the 1.2 million jobs created by the private sector last year, for example, 26 percent were temporary positions, and in November, temp jobs soared to 80 percent of that month's total.

What's happening here is not merely a matter of a few million folks being momentarily down on their luck, but of an intentional dismantling of America's middle-class structure.