Ranking the states most and least dependent on the federal government

Food for thought! The progressive erosion of federalism in the US by a bigger and bigger federal government! It has been debated for several decades!

Ranking the states most and least dependent on the federal government "In some states, federal funds make up a modest share of government revenue, while in others they represent 40% of state and local budgets."

Too little history! This chart should go back to at least 1960!

Federal aid as a share of total state revenue

Federal aid as per state capita

How higher Canadian Provincial Governments spending results in higher deficits, taxes, and debt servicing costs

What is true for Canadian provincial governments is also true for other Western government entities!

"... Similarly, we find that a $1.00 increase in per-capita provincial program spending, which causes a rise in the budget deficit, results in a $0.71 decline in future program spending, a $0.26 increase in future [taxes], and a $0.10 increase in debt service payments, all measured in present value terms. This means that an increase in provincial program spending in the current period is not entirely offset by future spending reductions and that there will be an associated increase in the future tax burden. Thus, the impacts of fiscal shocks can reverberate for several years.
In Canada, federal cash transfers to the provinces represent a sizable portion of total provincial government revenues, particularly for provinces that receive equalization grants. This study also highlights the importance of federal grants and transfers in provincial governments’ fiscal adjustments. According to the available empirical estimates, a $1.00 permanent increase in equalization grants and other federal transfers such as the Canada Health Transfer (CHT) and Canada Social Transfer (CST) causes provincial program spending to increase by $0.69 and $0.80, respectively, with no significant change in provincial governments’ own-source revenue. ..."

How Provincial Governments Respond to Fiscal Shocks and Federal Transfers | Fraser Institute

Fiscal Policy Report Card on America’s Governors 2022 by Cato Institute

Recommendable! 

The eight failed states are all run by Dimocratic governors! No surprise or just political bias? You'll be the judge! 😊

Minnesota	Tim Walz (D)	34	F
Pennsylvania	Tom Wolf (D)	33	F
Illinois	J. B. Pritzker (D)	32	F
Michigan	Gretchen Whitmer (D)	32	F
New Jersey	Phil Murphy (D)	29	F
Oregon	Kate Brown (D)	29	F
California	Gavin Newsom (D)	29	F
Washington	Jay Inslee (D)	28	F

Fiscal Policy Report Card on America’s Governors 2022 | Cato Institute

President Trump Urgently Needs To Adress Runaway National Debt

Posted: 12/13/2018

Trigger

U.S. federal debt keeps on rising to unsustainable levels and it has been doing so under President Trump as well.

President Trump Made Some Progress Towards Stabilizing Or Reducing Debt

President Trump’s rescission request in May 2018 to the U.S. Congress of $15.4 billion was a valiant effort and it was a much appreciated step in the right direction, but far from enough. Unfortunately, the chronically foolish Democratic Party failed again by voting it down in the U.S. Senate in June 2018.

Trump also proposed to reform federal government employee salary and contributions so that employees pay more for their lavish benefits. A very welcome reform! (Source 4, 5)

I believe, there were more proposals by Trump to reduce federal expenditures.

A Brief Summary

U.S. National Debt has:

1. Tripled since 2000 to now $21.5 billion, while GDP less than doubled
2. Relative to GDP, national debt climbed from a very benign 55% in 2000 to over 100% of GDP in 2017. Only good news is that in 2016 and 2017 it stabilized at about 104%.
3. Among all OECD countries, the U.S. ranks 5th in terms of highest debt to GDP ratio (in 2015; latest available data), only surpassed only by countries like Portugal, Greece, Italy, and Japan. This is really bad!
4. The high national debt of the U.S. and other OECD countries is the major reasons why central banks have kept interest rates at extremely historical low levels for over a decade or otherwise the government net interest payments to service national debt would have become explosive
5. Obama added about $10.6 billion or roughly $1.3 billion per year in office. Had Obama and the Democrats not willfully prolonged and exacerbated the Great Recession, this dramatic increase in national debt would not have occurred
6. Trump has added so far less than about $2 billion or less than $971 billion per year in office

Here are the hard and very unpleasant facts (in $ billions):

Year	Nominal GDP	Debt	Debt Increase	Debt/GDP
2018		$21,516	$1,271
2017	$19,485	$20,245	$671	104%
2016	$18,707	$19,573	$1,423	105%
2015	$18,219	$18,151	$327	100%
2014	$17,522	$17,824	$1,086	102%
2013	$16,785	$16,738	$672	100%
2012	$16,197	$16,066	$1,276	99%
2011	$15,543	$14,790	$1,229	95%
2010	$14,992	$13,562	$1,652	90%
2009	$14,449	$11,910	$1,885	82%
2008	$14,713	$10,025	$1,017	68%
2007	$14,452	$9,008	$501	62%
2006	$13,815	$8,507	$574	62%
2005	$13,037	$7,933	$554	61%
2004	$12,214	$7,379	$596	60%
2003	$11,458	$6,783	$555	59%
2002	$10,936	$6,228	$421	57%
2001	$10,582	$5,807	$133	55%
2000	$10,252	$5,674		55%

Sources:

1. Treasury Direct Historical Debt Outstanding – Annual
2. BEA NIPA Table 1.1.5. Gross Domestic Product
3. OECD Data General government debt
4. Trump Proposals Would Cost Federal Employees, Retirees above $143 Billion
5. Trump thanks federal employees with $143.5 billion in retirement cuts

Reckless Monetary Policy Dooms Western Democracies

Posted: 6/17/2016

I have blogged here numerous times about the irresponsible and reckless monetary policies pursued by the likes of Alan Greenspan and the dim witted economic professor and successor Ben Bernanke. The current head of the U.S. Federal Reserve System, another very pale economic professor, Janet Yellen is not much better. Mario Draghi (or Dracula) or his predecessor at the European Central Bank have not been better either. By the way, Ben Bernanke and Mario Draghi were both students of Stanley Fischer.

To destroy western civilization and individual freedom politicians start by debauching the currency. This basic wisdom has been known hundreds of years before Maynard Keynes or Lenin.

If awful monetary policies are pursued in conjunction with irresponsible fiscal policies (more deficits and more government debt and more government regulation instead of lower taxes and more economic freedom) as is the case in the first decade of the 21st century, then our elected politicians have created the perfect storm.

Why the considerable rise of populism in recent times in Europe or the USA?

Why are Western democracies in crisis as I blogged here before?