Category Archives: Economy and Debt

June 21, 2017

Which Are Death Spiral States?

Does your state have more takers than makers? Check it out.

California has a powerful economy, with 14 million private-sector jobs. It also has burdens: welfare recipients (12.6 million), generously paid government employees (2.1 million) and people collecting government pensions (1.3 million).

Add up the numbers. There are 114 clients drawing from the government for every 100 people chipping in by working outside the government and paying taxes. We’re calling this the Feedme Ratio. Six states have a number over 100.

These states are at risk of going into a downward spiral in the next recession. The burdens will remain but too many of the providers—employers in the private sector—might shrink or decamp. Why add jobs in a state that asks each productive worker to carry not just his or her own weight but also the weight of one other person?

New York is on the list of at-risk states, with a Feedme Ratio of 108. New Mexico is in the worst shape, with 143 government clients for every 100 private-sector workers.

The three other states with Feedme Ratios over 100: West Virginia at 116, Mississippi at 111 and Arkansas at 103. You can check your state on this map.

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June 10, 2017

California ranks second to last on list of best states to make a living in

MoneyRates.com said the challenges in California are similar to Hawaii in that, “a fairly high median wage it devalued by a high cost of living and high state income taxes.”

In more ways than one, life here on the Central Coast mirrors some of California’s best qualities — limitless outdoor opportunities, constant sunshine and easy access to the Pacific Ocean.

But, the financial drawbacks of the Golden State also have to be weighed for anyone considering living here, as shown in a report last month stating that only a quarter of San Luis Obispo County residents can afford a median-priced home here.

It’s a statewide issue, and others have taken notice.

A list by personal finance site MoneyRates.com ranks the best and worst states to make a living in this year and slots California as the second-worst in the country.

Another desirable location, Hawaii, finished dead-last for the seventh consecutive year.

The ranking is based on five factors: median income, cost of living, unemployment rates, state income taxes and workplace safety.

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June 6, 2017

Venezuela crisis forces women to sell sex in Colombia, fuels slavery risk

“The economic instability, the insecurity in Venezuela, it all becomes unbearable.”

As a humanitarian and political crisis in neighboring Venezuela deepens, a growing number of Venezuelan women are working in bars and brothels across Colombia.

“I didn’t do this in Venezuela. I never ever imagined I’d be doing this in Colombia,” said Maria, who declined to give her real name, to Reuters.

She charges $17 for 15-minutes of sex, and the money earned is spent on buying medicine for her mother who has cancer.

For the past year, she has traveled back and forth from Bogota to Venezuela’s capital Caracas every 90 days, before her tourist visa expires, carrying medicine, food and soap.

“I’m ashamed I have to do this. It’s a secret,” said Maria, 26, who has told her family she is a traveling salesperson.

Venezuelan migrants are often lured by false promises of well-paid work in Colombia’s restaurants and bars or as domestic workers.

But then they find they are forced to work long hours with little or no pay, are not free to leave the bar they work in, and may be trapped by debts owed to the agents who brought them across the border.

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June 2, 2017

Illinois cut near junk by Moody’s and S&P, lowest ever for a U.S. state

By June 30, the state will owe an estimated $800 million in interest and fees on the unpaid bills that have been piling up, according to estimates from Comptroller Susana Mendoza, a Democrat. She warned of “dire” consequences for residents if a budget isn’t reached by the start of fiscal year 2018 on July 1, including the shuttering of more social service providers and layoffs at public universities.

Illinois had its bond rating downgraded to one step above junk by Moody’s Investors Service and S&P Global Ratings, the lowest ranking on record for a U.S. state, as the long-running political stalemate over the budget shows no signs of ending.

S&P warned that Illinois will likely losing its investment-grade status, an unprecedented step for a state, around July 1 if leaders haven’t agreed on a budget that chips away at the government’s chronic deficits. Moody’s followed S&P’s downgrade Thursday, citing Illinois’s underfunded pensions and the record backlog of bills that are equivalent to about 40 percent of its operating budget.

“Legislative gridlock has sidetracked efforts not only to address pension needs but also to achieve fiscal balance,” Ted Hampton, Moody’s analyst, said in a statement. “During the past year of fruitless negotiations and partisan wrangling, fundamental credit challenges have intensified enough to warrant a downgrade, regardless of whether a fiscal compromise is reached.”

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June 1, 2017

‘It’s bankrupting us!’ Polish MP savages EU free movement over high migration to Britain (Video)

Europe’s cherished principle of free movement is bankrupting Eastern European countries because so many young people of working age are quitting the region to head to Britain, a Polish MP has warned.

May 31, 2017

Rural America Is the New ‘Inner City’

A Wall Street Journal analysis shows that since the 1990s, sparsely populated counties have replaced large cities as America’s most troubled areas by key measures of socioeconomic well-being—a decline that’s accelerating

At the corner where East North Street meets North Cherry Street in the small Ohio town of Kenton, the Immaculate Conception Church keeps a handwritten record of major ceremonies. Over the last decade, according to these sacramental registries, the church has held twice as many funerals as baptisms.

In tiny communities like Kenton, an unprecedented shift is under way. Federal and other data show that in 2013, in the majority of sparsely populated U.S. counties, more people died than were born—the first time that’s happened since the dawn of universal birth registration in the 1930s.

For more than a century, rural towns sustained themselves, and often thrived, through a mix of agriculture and light manufacturing. Until recently, programs funded by counties and townships, combined with the charitable efforts of churches and community groups, provided a viable social safety net in lean times.

Starting in the 1980s, the nation’s basket cases were its urban areas—where a toxic stew of crime, drugs and suburban flight conspired to make large cities the slowest-growing and most troubled places.

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May 15, 2017

Swedish Finance Minister Admits ‘Big Problems’ with Economy After Migrant Influx

Finance Minister Magdalena Andersson has admitted Sweden has “major problems” as a result of the population growth brought on by mass immigration.

Earlier this week, the Swedish Association of Local Authorities and Regions (SKL) admitted, by 2020, municipalities face a funding deficit of 40 billion Swedish Krona (£3.5 billion) to finance services like hospitals and nursing homes.

“Demographic trends show that, with more children and more elderly people, the need for local government services is expected to grow significantly faster than the tax base,” says Annika Wallenskog, chief economist at SKL.

Andersson told Swedish Television News (SVT) that “it is quite obvious that we have big problems” as a result of the demographic changes aggravated by mass migration.

The Socialist minister stressed the country must hire more staff and build more facilities, and said politicians cannot afford to promise any tax cuts.

Sweden’s National Audit Office announced in November that it believes the government “underestimates public spending”.

In a piece published by Dagens Nyheter, the office remarked: “”If the government’s forecasts are realised, Sweden will be required to make significant reductions to welfare, and municipalities significant cuts by 2020.

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May 2, 2017

California Squashes Its Young

The Golden State’s suffocating economic policies are driving out a new generation.

In this era of anti-Trump resistance, many progressives see California as a model of enlightenment. The Golden State’s post-2010 recovery has won plaudits in the progressive press from the New York Times’s Paul Krugman, among others. Yet if one looks at the effects of the state’s policies on key Democratic constituencies— millennials, minorities, and the poor—the picture is dismal. A recent United Way study found that close to one-third of state residents can barely pay their bills, largely due to housing costs. When adjusted for these costs, California leads all states—even historically poor Mississippi—in the percentage of its people living in poverty.

California is home to 77 of the country’s 297 most “economically challenged” cities, based on poverty and unemployment levels. The population of these cities totals more than 12 million. In his new book on the nation’s urban crisis, author Richard Florida ranks three California metropolitan areas—Los Angeles, San Francisco, and San Diego— among the five most unequal in the nation. California, with housing prices 230 percent above the national average, is home to many of the nation’s most unaffordable urban areas, including not only the predictably expensive large metros but also smaller cities such as Santa Cruz, Santa Barbara, and San Luis Obispo. Unsurprisingly, the state’s middle class is disappearing the fastest of any state.

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April 30, 2017

US has regressed to developing nation status, MIT economist warns

Peter Temin says 80 per cent of the population is burdened with debt and anxious about job security.

America is regressing to have the economic and political structure of a developing nation, an MIT economist has warned.

Peter Temin says the world’s’ largest economy has roads and bridges that look more like those in Thailand and Venezuela than those in parts of Europe.

In his new book, “The Vanishing Middle Class”, reviewed by the Institute for New Economic Thinking, Mr Temin says the fracture of US society is leading the middle class to disappear.

The economist describes a two-track economy with on the one hand 20 per cent of the population that is educated and enjoys good jobs and supportive social networks.

On the other hand, the remaining 80 per cent, he said, are part of the US’ low-wage sector, where the world of possibility has shrunk and people are burdened with debts and anxious about job security.

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March 28, 2017

Venezuelans Using ‘Rare Pepes’ and Bitcoin As Currency

Internet users in Venezuela have finally quantified what it truly means to have a rare Pepe, buying and selling Pepe-themed, bitcoin-linked trading cards as a way to escape the economic control of their socialist government.

The idea of images of the popular green frog being “rare” started off as a joke on 4chan, where users would claim that their images of Pepe were rarer and more valuable than everyone else’s. It escalated into people selling their collections of Pepe on eBay, with bids reaching up to almost $100,000 before eBay took it down.

There were never any serious transactions however, with everyone involved enjoying the ironic humour of the situation. More recently, a group of redditors have been “trading” memes of any shape and size on /r/MemeEconomy, attempting to create a stock market in meme popularity. But, it turns out that rare Pepe collecting online is now a serious business.

Sometime last year, an unknown individual began issuing “official” rare Pepe trading cards using the Counterparty platform to link them to bitcoin, in an attempt to poke fun at another online trading game called Spells of Genesis. Today, these cards can be exchanged for the equivalent of thousands of US dollars on Counterparty’s decentralised exchange.

This is due to a creation of artificial scarcity in the cards (as one would expect trading cards to have). Anyone can issue their own rare Pepes, but these are then verified by the official Rare Pepe Foundation, and linked to a certain piece of the bitcoin chain via a practice known as coin colouring. Whomsoever owns that particular bitcoin key address owns the Pepe associated with it. All verified rare Pepes can be viewed in a complete directory of them.

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