Maybe you’re looking for a fresh start. Or perhaps you’re looking to find a different job, or you’re trying to get out of the city. Whatever the case may be when you’re looking for a new place to live there’s a lot to consider. And if you’re thinking of crossing state lines to find a new home, there’s one vitally important detail that you need to think about and research.
Most people don’t consider this, but you should really look into the financial stability of any state that you’re thinking about moving to. If worse comes to worst, and the economy collapses, you want to make sure that the state you live in is fiscally responsible. States that have high debts and low credit ratings are living on the edge. Any major economic event could push them into bankruptcy.
That means pensions could go unfunded. Public services like law enforcement and firefighting would be understaffed. The infrastructure of the state would crumble, and public education would be decimated. Taxes would likely be increased, which would only exacerbate the financial problems of the state because businesses would leave, leading to more unemployment and a smaller tax base. Obviously, all of these factors could contribute to the risk of civil unrest.
In other words, any financial calamity that occurs at the national level would be magnified at the state level. The economy of these states would fall into a tailspin, which would make a life for the average person exceedingly difficult.
So which states should you avoid? There are three factors you should look out for. There’s the amount of debt as a percentage of the state’s GDP, the amount of debt per person (debt per capita), and the state’s current credit rating.
The 10 states with the worst debt to GDP ratios are:
- New York-22.71%
- South Carolina-21.31%
- Rhode Island-19.40%
- Washington-18.83%
- Florida-18.65%
- Kentucky-18.50%
- Illinois-18.45%
- Connecticut-17.52%
- California-17.18%
- Pennsylvania-17.17%
The 10 states with the most debt per person are:
- Massachusetts-$11,337.63
- Connecticut-$9,297.33
- Rhode Island-$8,919.27
- Alaska-$8,516.41
- New Jersey-$7,517.15
- New York-$7,040.97
- Hawaii-$6,194.64
- New Hampshire-$6,152.00
- Delaware-$5,962.86
- Vermont-$5,259.69
And perhaps the most important factor is the credit rating of any given state. This gives you a good idea of how investors think a state will fare financially in the future, as opposed to a state’s current financial woes. According to credit rating agencies like Standard and Poor’s, as of last year, the states with the five worst credit ratings are:
- Illinois-BBB
- New Jersey-A
- Kentucky-A+
- California-AA-
- Connecticut-AA-
Though those ratings don’t look too bad, it’s important to keep in mind that those states have had sub-par credit ratings for a long time. There’s no indication that they’re going to get their act together any time soon because they’ve been teetering on the edge for years. When the next wave of the economic collapse hits, these states (along with states that topped the first two lists, such as New York, Rhode Island, Massachusetts, South Carolina, and Connecticut) are going to be the first to feel the pain.
Think of it like this. If a storm arrived and threatened to flood a community, the homes that were built in low-lying areas are going to be underwater first. These states are like the houses near the river. So if you’re planning to move, look into the financial stability every state you’re considering, and seek higher ground.
This article was originally published at Ready Nutrition™ on April 11th, 2017
Patrick Flynnon April 14, 2017 at 8:57 pm
I’m somewhat surprised that Louisiana didn’t make the list of financially troubled states. Huge state deficit and 10% sales tax. The flood of last August put a huge strain on the local infrastructure and wrecked a lot of family owned businesses. I have found that the folks in LA are very resilient and help their neighbors. I relocated here from Ohio after a long absence from the south and am pleased to be contributing to our state economy. Come on down! Great people, excellent food and mostly conservative.
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aliza1on June 25, 2017 at 11:44 am
Same for Kansas. Huge state deficit and 9% sales tax (in some areas) AND they put new legislation on the ballot for the people to vote themselves more taxes! Imagine that. Only the dumbest will vote YES. Just wait and see.
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Shelley Andersonon April 15, 2017 at 1:21 pm
Don’t have a lot of good news from Iowa. Our highway patrol has been drastically underfunded. Our infrastructure is crumbling, has not been kept up. And our state surplus we have held for so long has been pilfered away so that now we are in debt for the first time in a long time.
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omnion April 15, 2017 at 8:02 pm
the debt per capita is an inaccurate measure/concept. It should be debt per TAXPAYER-WELFARE recipients will never be part of any payoff solution-only earning taxpayers will. So only TAXPAYERS should be used-and the debt per TAXPAYER will be much, much greater than the false debt per capita figure.
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absolute rightson April 15, 2017 at 8:37 pm
Its also a misleading concept because the debt does not belong to the taxpayers, the debt only belongs to the separate and distinct legal entity that acquired the debt…
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steven jacobson April 16, 2017 at 11:35 am
perhaps-but, if that agency is part of the state government, the taxpayer IS on the hook eventually-Happy Easter!
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absolute rightson April 16, 2017 at 11:44 am
Society is not responsible for the debt of the government that rules it.
Governments are separate and distinct from society with the power to own things and borrow money. It’s property is its property alone, and its debts are it’s debts alone.
If a government wishes to pay its debts by stealing from the society it rules then it may.
This is basic civics. Political inclinations notwithstanding.
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steven jacobson April 16, 2017 at 8:24 pm
do you honestly think if the gov’t NEEDS MONEY BADLY that it won’t tax or confiscate your wealth for the “greater good”? Get real-you saw what happened in Cyprus a year or so ago. Or what Modi just did in India, or what is going on in Venezuela.
TMSon April 16, 2017 at 7:38 pm
Worse is to ignore debt that’s not official debt. NJ and IL have debt in the form of unplayable pension liabilities. That’s why their credit ratings are lowest.
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steven jacobson April 16, 2017 at 8:26 pm
I think they ignore it because they have no intention of paying it. They will shift the pensions to the federal Pension Liability Guarantee Corp-and the workers will get 20 cents on the dollar.
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RufusVonDufuson June 26, 2017 at 6:49 am
And, omni, ONLY taxpaying citizens should be allowed to vote! The welfare class votes enmasse for the party giving them the most FREE stuff!
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steven jacobson June 26, 2017 at 9:51 am
I would agree with the “welfare class” not being able to vote. But what about people who paid taxes for 40 years and now live off social security and so pay no taxes?
Personally, I would do away with welfare completely-Reply
docellis124on April 16, 2017 at 4:57 pm
you wrote “That means pensions could go unfunded. Public services like law enforcement and firefighting would be understaffed. The infrastructure of the state would crumble, and public education would be decimated.” like those are bad things…..
I live in CA, and if this is what I can experience if I am in CA, I will be a happy camper…..
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steven jacobson April 16, 2017 at 8:27 pm
if you are not killed , that is.
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docellis124on April 17, 2017 at 3:58 pm
a cop is more likely to kill me than some random street gangster, or some random foreigner…..so, understaffing the ranks of predators looks like good news to me…
one other question: given that everybody dies, what is your point?
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RufusVonDufuson June 26, 2017 at 6:51 am
You must be a criminal.
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docellis124on January 19, 2018 at 3:46 pm
yup
RufusVonDufuson June 26, 2017 at 6:47 am
Notice they are almost all Dem bastions of stupidity and overspending. Send them all of the illegals and “refugees.”
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Angela Hamonon June 28, 2017 at 11:19 pm
I am new to Louisiana and have always wanted to live here. I am glad we’re not on the list. How long til I can call myself a Cajun?
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