Bankrupt States

Government spending doesn’t create jobs. Private capital creates jobs. Without making profits, a business moves to where it can make a profit.

Some states are on the brink of bankruptcy. Why? Because deficit spending, caused some of them to raise taxes and fees. The hike in the costs of taxes and fees, coupled with additional restrictions placed on profitable practices through ever increasing regulations, caused businesses to move out of these states. Business taxes the states would have otherwise collected from the moved businesses evaporate, as do the personal income taxes that would have been collected from former employees of the relocated businesses. Rather than taking in taxes from working people, the already financially strapped states are paying out unemployment insurance. Add to that the unfunded costs of Ponzi scheme public union pension funds, and you have the perfect recipe for state bankruptcy.

Transfer that recipe from a single state to Washington DC and you have a major problem.

Have you ever heard the phrase: If what you’re doing isn’t working, it’s time to try something else? If increased taxes, fees and regulations are driving business away; the logical alternative is: to lower taxes, cut fees and reduce regulations. More importantly, eliminate the root of the problem. Stop spending money you don’t have and you won’t “need” to raise taxes. When your expenditures exceed your income, cut spending. While you’re at it, eliminate the unnecessary costs of union labor in the public sector. The extortion of public employee collective bargaining practices, combined with their quid pro quo relationship with politicians of votes in exchange for non-stop escalating salaries and unfunded pension liabilities placed on the back of the state, and by extension, the taxpayer, is a formula for long term economic disaster.

Keep a weather eye on the states of Illinois and New Jersey. Illinois’s taking the higher tax route, while New Jersey is going in the opposite direction. The federalist laboratory of state experimentation will be quite instructive to the rest of the country.

I’m willing to bet that the “progressive” party and their multiple media Pavlovian lapdogs will be salivating over… I mean editorializing on behalf of Illinois.

My money’s on New Jersey.


3 Responses to “Bankrupt States”

  1. Kerry Royce Says:

    Hey MJ, you’re right on this one. Not only are some states raising taxes to a prohibitive level for businesses to thrive in they are indeed running them off to states like Texas and Florida. Some businesses may now even relocate to New Jersey since the citizens of New Jersey have demonstrated some simple common sense.
    Here is where push will come to shove. States like California and Illinois will soon become the “bail out states”. Those states will seek a federal government bailout for their debt. The bailout states will look to states like Texas and Florida and other states that have lived within their budgets to in effect “bail them out” of their financial mess. I think it will come sooner rather than later. It will simply be another of the series of “transfers of wealth” that have become so common in these United States.

  2. Fell: Bankrupt States | Westside Republicans Says:

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  3. Alex Says:

    California will suck the life out of every state if we let her. I say let her fall on her sword and don’t bail her out!

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