Alabama economy doomed! Businesses leave en masse as rats fleeing a sinking ship. Only the plutocracy will remain to feed upon one another’s corpses. Good-bye blood suckers.
As Forbes advises:
To lend money to California, Illinois or to open a business in Alabama and the other eight states perched on the precipice requires a leap of faith. So does buying a house in those locales. Don’t count on a property tax limit to protect your home’s value. If other taxes are high enough, there won’t be any buyers.
Eleven states made Forbes’ list of danger spots for investors including California, New York, Illinois, and Ohio. They warned (and with the cliff it is even more critical), if you have muni bonds in these states – clean up your portfolio; if your career takes you there – rent, don’t buy! Two factors determine their list of ‘fiscal hellholes’. The first is whether there are more takers (someone who draws money from the government) than makers (the gainfully employed). The second is a state credit-worthiness score (via Conning) based on large debts, uncompetitive business climates, weak home prices, and bad trends in employment. Conning rates North Dakota the safest state to lend money to, Connecticut the most hazardous. A state qualifies for the Forbes’ death spiral list if its taker/maker ratio exceeds 1.0 and it resides in the bottom half of Conning’s ranking. See below for the 11 states to avoid…no matter what Bob Toll, Larry Yun, Bob Pisani, or Alexandra Lebenthal tells you..
Number 11 – Ohio Taker ratio: 1.00
The battleground state has a fiscal standoff between takers (people collecting welfare, a government salary or a government pension) and makers (private sector employees).
Number 10 – Hawaii Taker ratio: 1.02
Dark clouds over Waikiki Beach: Hawaii has slightly more takers than makers.
Number 9 – Illinois Taker ratio: 1.03
Dubious ex-gov Rod Blagojevich personifies what’s wrong with this state: Too many goodies promised to insiders. Unfunded pensions contribute to the balance of 103 takers to every 100 makers.
Number 8 – Kentucky Taker ratio:1.05
Twilight in Lexington. People drawing from government slightly outnumber people chipping in with private-sector jobs.
Number 7 – South Carolina Taker ratio:1.06
Riptides on Folly Beach.
Number 6 – New York Taker ratio: 1.07
Blackout in the Flatiron district after the hurricane. Manhattan still has a vibrant financial sector. Manufacturing there is extinguished. Causes: taxes, unions, regulations and cheap apparel workers abroad.
Number 5 – Maine Taker ratio: 1.07
Casco Bay, Portland. This is a state with a beautiful coastline and a ratio of 107 drawers from the public fisc to every 100 contributors.
Number 4 – Alabama Taker ratio: 1.10
Second fattest city in the nation.
Number 3 – California Taker ratio: 1.39
California is generous to a fault, at least to state employees and the needy. To private sector employees, who are outnumbered, it is not so hospitable.
Number 2 – Mississippi Taker ratio: 1.49
Flooding near Tunica in May 2011. The state ranks second to worst on the list of states burdened by a high ratio of takers (welfare recipients and state employees) to makers (private sector workers).
And The Worst State to live in or lend to is…
Number 1 – New Mexico Taker ratio: 1.53
Wildfire near the Los Alamos Laboratory in June 2011. In our taker/maker ratio, federal employees are excluded from the taker count since their cost is not borne locally. That doesn’t save this state from having the worst ratio in the nation.