States in a death spiral

By Tom Quiner

moocher-indexLet me pose a question: is a state better off if it has more “makers” or “takers?”

A maker is a person employed in the private sector. A taker is a person who gets money from the government.

Do you want more makers or more takers? Think about it.

Let’s try this one. Do you want to live in a state with more moochers, or less moochers? Whether you are a liberal or a conservative, you agree on the legitimate need for a safety net to protect those below the poverty level. Liberals and conservatives can have an honest debate on how high or low the net should be, but we agree on the idea of a safety net.

So what do I mean by a moocher? I suppose we might call a moocher someone receiving money from the state who is has income above the poverty level. So, is a state better off with more or fewer moochers?

Would you rather live in a state with a bad credit rating or a good one? With a bad business climate or a good one? Weak home prices or strong ones? Strong or weak employment trends?

Okay … these are all loaded questions. I put a chart up called the “Moocher’s Index” which simply shows the number of non-poor signed up for redistribution programs by state. I don’t know that it proves anything as a stand-alone graphic.

Forbes magazine, though, explored some of the questions above and identified eleven states in a “death spiral.” These states are:

√ California

√ New Mexico

√ Mississippi

√ Alabama

√ Illinois

√ Kentucky

√ Ohio

√ South Carolina

√ New York

√ Maine

√ Hawaii

Forbes looks at two elements to identify states in death spirals. First, all of these states have more takers than makers. New Mexico is worst with 1.53 takers for every maker. By contrast, a state like Texas has only .82 taker for every maker.

The second element is their credit worthiness, based on an analysis by a money management firm, Connor & Company. It downgrades states with high debt, uncompetitive business climates, weak home prices, and weak employment situation.

You can see some overlap with moocher states and states in death spirals.

No states with low tax burdens are on the list. But three of the states with the highest local and state tax rates are on the list: California, New York, and Maine.

Interestingly, every state on the list, except for Hawaii, has a fertility  rate below replacement level of 2.1. In fact, two of the states high up on the moocher index, New York and Maine, rank among the lowest fertility birth rates in the nation.

People are good. Young people are good. They are a source of vitality and innovation for states. They are future taxpayers. Creation should be encouraged. By the same token, states need more makers than takers. They need a favorable tax climate.

The eleven states above represent the consequence of big government run amuck. I wish President Obama would take notice and stop mimicking them.



  1. Tom Maly on March 20, 2013 at 7:39 pm

    Research on “years under democratic” vs “years under Republican” leadership in these states would be interesting e.g. governor/house/

    • quinersdiner on March 20, 2013 at 8:14 pm

      The same thought crossed my mind. I might look into it.

  2. Bob Vance on March 21, 2013 at 1:40 pm

    If a person works thirty years for the state, are you saying they don’t deserve their pension?

    • quinersdiner on March 21, 2013 at 1:54 pm

      Nope, I’m not saying that.