11 states now have more people on govt aid than they have people working/producing. This coupled with a fiscal cliff, already high unemployment, national debt surpassing gross domestic product (GDP), and a long line of FAILED quantitative easings,... expect for the economy to get a LOT worse for many, many years to come. Thanks statism
Do You Live in a Death Spiral State? - Forbes
Think twice about buying a house or investing anything in these states.
Hoax or Fact:
The message in fact relates to an article on Forbes titled 'Do You Live In A Death Spiral State', written in Taxes category by William Baldwin who generally suggests investment strategies. In the present article, he suggests people in USA not to invest in 11 states, saying that they are in a 'Financial Death Spiral'. As shown marked in the picture, the report says that majority of people in those states are dependent on the government for their income, labelled as takers, and has very less number of private workers, who are in fact givers and makers of money. This is like there are more takers than givers and makers in those 11 states of USA and so their financial future would be risky, especially with respect to tax burden and unemployment, leading to what can be a Financial Death Spiral. Because of this, the report suggests people not to invest or buy a house in those 11 states, but rent instead. The list of 11 states includes New York, California, Illinois, Ohio, Mississippi, Alabama, Maine, South Carolina, Kentucky, New Mexico and Hawaii.
Although it is a fact that these states are going through certain amount of financial crisis, and property taxes can go high in near future, experts believe that these states are strong enough to make quick changes in their economy and can bounce back to normal financial state. Steve Malanga, Manhattan Institute senior fellow and City Journal's senior editor expresses the same opinion in a news show with Fox Business, saying that the term 'Financial Death Spiral' relating to these 11 states is a bit dramatic to believe. But he also points out that property taxes in some states like Massachusetts are solely used to pay the retirement benefits of the people and so are rising high these days. The possibility of property taxes going high is likely. California is another state that has significantly raised its taxes with an intention of improving its economy in near future, but it is leading to serious job migration problems that can be damaging to the economy in long run. It is a fact that in financial crisis like these, the Government debt of any kind would most generally be collected from its people in the form of taxes. But it would be difficult to perfectly predict the financial future of these states, and that they will be in a financial dead spiral.
So, like the article suggests, the best idea would be to be careful while investing in these states.