It’s been a little while so let’s check in with the American political class and review the latest political class insanity in several different areas.
1)We have often talked, reviewed and fretted about the sad reality that the American political class segment in Washington has run up a national debt that is fast approaching an incomprehensible level of $40,000,000,000,000. Mathematically, to pay off this debt, every American would have to pay almost $120,000 each or almost half a million dollars for a family of four.
But the debt problem does not end in Washington:
According to an analysis by Reason magazine, as of the end of 2023, state and local government entities had a total state, county, and local debt level of about $6,100,000,000,000 or six trillion dollars.
It would cost each American over $18,000 each to pay off this debt load in addition to the debt load of the Federal government.
California’s government entities have the largest debt load of about $1 trillion.
Other states with very high debt levels include New York (almost $800 billion), Texas ($550 billion), Illinois (just over $400 billion), and New Jersey (just over $300 billion).
Note that four of the top five debt burdened states, California, New York, Illinois, and New Jersey, are the top four states that we believe are in a race to become the first state government to go bankrupt.
Eleven states have a debt load over $100 billion.
On a per resident basis, New York gets the top spot with a debt burden of $39,491 per person, New Jersey is third with a debt level of $33,338 per person, Illinois is fourth with a debt level of $31,873 per person, and California is seventh with a debt level of $27,362 per person.
The real disgrace of all of this debt at every level of government, is that politicians at every level of government have misspent, wasted, and abused the money they were entrusted with: Social Security is heading towards insolvency, Medicare is headed towards insolvency our infrastructure is falling apart, our education efforts generally fail to educate, our electric grid is old and vulnerable, etc. We basically have nothing positive to show for the debt that politicians have run up.
And yet across many states (New York, New Jersey, Illinois, California), the top candidates we feel are leading the race to state government bankruptcy, the politicians continue to raise taxes and incur debt when they have proven they are poor stewards of the tax money they already get.
2)One of the drivers of a state spiraling downward into financial insolvency is the high tax burden state politicians place on their residents and businesses. But these people never learned that raising and raising taxes eventually drives businesses and residents to other geographic locations where they can keep their hard earned wealth.
Obviously, in Virginia, these economic lessons have not been learned:
Virginia Democrats have introduced a number of tax burden increasing laws for their citizens and businesses to bear.
HB 378 would impose a 3.8% income tax on individuals, trusts, and estates and would increase the state’s marginal income tax rate to 9.55%.
HB 900 would allow sales tax increases on transportation districts.
It would also put a new tax on every retail delivery (think Amazon, Uber Eats, UPS, etc.).
HB 919 would place an 11% tax on firearm and ammunition purchases.
HB 978 would expand the sales and use tax to dry cleaning , landscaping and other currently exempt services.
The new governor will re-enter Virginia into the Regional Greenhouse Gas Initiative which will increase state residential and business utility bills.
Meanwhile, neighboring states are reducing the tax burden on their people.
West Virginia is phasing out its state income tax, North Carolina reduced its income tax rate from 4.25% to 3.99%, and is also phasing out its corporate income tax, and Georgia and South Carolina are also looking to phase out their state income tax altogether.
According to Grover Norquist of the Americans for Tax Reform: “It’s always a bad time to raise taxes, but it would be particularly foolish for Governor Spanberger and the Democrats who now control Richmond to do so at this time of heightened state tax competition. Governors and lawmakers in other states aren’t just seeking to reduce income taxes and other levies, they’re pursuing full tax elimination in many state capitals. For individuals, families, and employers who wish to avoid the hostile tax policies pursued by Democrats in Richmond, they have plenty of options close by.”
Several years ago we discussed a situation in Maryland where state politicians raised the state income tax rate on anyone making over a million dollars a year, expecting to gain over $100 million in increased tax revenue from millionaire earning residents. Several years later, they found that not only were they not getting the additional $100 million in increased tax revenue, but tax revenue from millionaire residents actually fell by over a quarter billion dollars.
Millionaires are not stupid: they either found ways to shield themselves from the tax increase or more likely, moved across the border to another state to protect themselves from the increased taxes. The same thing is happening in California, New York, Illinois, and New Jersey: residents and businesses are simply picking up and leaving these high tax states and relocating to lower taxed states like Texas and Florida.
The same basic economic principle will also play out to the dismay of the economically ignorant politicians in Virginia: their residents and businesses will eventually migrate out of the state, taking their tax base and tax revenue with them and who knows, Virginia might enter the race to bankruptcy court also.
3)And while politicians keep taking our money and wealth, they constantly come up with novel and despicable new ways to waste that wealth.
The following outlines a wasteful spending habit of Washington politicians that we had never heard of before:
According to the organization, Open The Books, the U.S. taxpayer does not know that millions of their dollars are funneled to the favorite universities of Washington politicians.
Last year, 24 U.S Senators were allowed to designate $636 million dollars of your tax money to the universities they attended as students.
Kentucky Senator Mitch McConnell requested $164.9 million for his alma mater, the University of Kentucky, which follows on his diverting $750,000 of taxpayer money way back in 2003 so that the university could build the Mitch McConnell Center For Distance Learning.
West Virginia Senator Jim Justice requested $57.5 million of taxpayer money for his alma mater, Marshall University, including a whopping $1,5 million to “increase grant writing and project development capacity.”
Washington Senator Patty Murray requested $59.9 million of taxpayer money for her alma mater, Washington State.
You get the idea, we will not go through the entire list of Senators but it is certainly a novel easy to waste money feeding the egos and the alma mater universities of those in the Senate. Meanwhile, millions of Americans are homeless, hungry, in need of medical care, lack health insurance, and are stretched to the limit within their budgets, But the priorities of these Senators are their alma maters, not their constituents.
Oh, by the way, the above numbers are just for Senators’ alma maters, there is another whole other slush fund the members of the House of Representatives use to reward their personal alma maters and their egos.
That will do it for today: state and local government have also run up untold, and possibly unpayable mountains of debt, but have not fixed any societal problems, Virginia may have just entered the state government race to bankruptcy with their bevy of new taxes, and Congressional members shower millions on their alma maters while their constituents continue to suffer.
**********************
If you agree that we need to deseat every member of Congress for their lack of success and accomplishment, then please consider going to the following petition link to help the cause:
https://www.change.org/p/deseat-congress-reset-freedom
**********************
