Where Should I Live (Where I Won't Get Crushed)?

I live in New York and own property here. People in New York have begun to view their homes not as assets but as potential liabilities, since it is through people’s homes that the state and local governments channel much of their taxation. New York is already an ultra-high tax state with piles of debt, but worse than that, it is looking an enormous unfunded pension liability for all those unionized public sector employees.

When you move to New York, you are basically assuming a portion of both the existing debt and the unfunded liabilities. Call this Real Debt. Consider this a liability on your family’s balance sheet, because they will come after you for it. For New York, I calculate this number to be $22,997 per person. Minors don’t pay taxes (much), so this actually works out to more like $32,500 per person if you are over 21. $65,000 for a married couple. And, of course, much of our population doesn’t pay taxes, so the real number for taxpayers is even higher than this, likely much higher.

One also needs to keep in mind that this is just the number to cover what has already been spent/allocated for without having actually been paid for. The operating expenses of the state – and they run a crackerjack operation here in New York – come on top.

Few people I know plan to live the rest of their lives in New York. The state has made it untenable to retire here, particularly if you have any substantial assets. So, the question becomes, where do you go? In which state do you assume the smallest liability for the privilege of living there?

I wanted to get to the bottom of this, so I decided to rank every state by its "Total Real Debt" per capita.

(Methodology: To get Total Real Debt, I started with each state’s total outstanding debt. From this, I subtracted any assets (three states – New Mexico, Alaska, and Texas – actually have the equivalent of sovereign wealth funds, related to natural resources or litigation settlements) to arrive at “net debt.” To this, I added total unfunded public pensions, which then gives us the Total Real Debt number. Take this, and divide by population to get debt per capita.)

Here are all 50 states plus the District of Columbia:

Sources: U.S. Census, American Enterprise Institute

Some thoughts:

Move to Alaska, Tennessee, Wyoming, Florida, or Indiana. All seem to have run their states in fiscally responsible fashions and all have zero or low tax rates.

Alaska actually pays you to live there, roughly $2000 a year. This comes out of a fund created from revenue related to the Alaska pipeline. Of course, this gets offset by the generally higher cost of living, and the fact that you will freeze your ass off most of the year.

The bottom ten (or even fifteen) are probably all as bad as they appear – total basket cases – with the possible exception of Nevada, which has plenty of gambling revenue (and thus the 0% tax rate).

All this is on top of the $42,000 per head that our national debt comes to. Somebody save us!

Goldman Under Fire

Henry Blodget has written an excellent early analysis of the case against Goldman and how weak it looks:

http://www.businessinsider.com/henry-blodget-the-key-question-was-paulsons-involvement-in-goldmans-cdo-material-non-public-information-2010-4

Note that Blodget is hardly a conservative.

One has to understand that the action against Goldman this is not about Goldman, but about Chris Dodd's bill to ramp up financial industry legislation. It is being used as "exhibit A." And what one has to understand about Dodd's bill is that it is not about reform at all but rather expanded government authority, much like the health care bill.

3 P.M. Update: It has now come out that the SEC vote on whether to go after Goldman was along party lines. Wonder what all the Goldies who lined up to donate money to the Obama campaign are thinking right about now?

The Other Half

Approximately half of New Yorkers don't pay any federal income tax. Here they were, yesterday, April 15th, sunning on the Sheep's Meadow in Central Park at 2 in the afternoon. A work day, a school day.

Ipad: First Impressions

We were all given Ipads at work. I work at a very hip place, you see. My first impressions:

1. I was most curious about whether this could supplant the laptop, particularly for business trips. The answer for me, and I suspect maybe 75% of business travelers, is yes. the email system is good, and typing is fine (certainly beating the Iphone). Most importantly, you can easily view any kind of Office attachment - you can't work with them, mind you, but they look great. I think most, but not all, business travelers can get by on two-day trips using these applications passively. For real road warriors, though, the laptop is still going to be necessary.
2. The device is undeniably beautiful, and people are drawn to it. At a pound and a half, it's not as light as you might imagine, and I don't think holding it for two hours while reading a book will be terribly comfortable. A flip case to carry/protect the device and also enable you to prop it up is going to be essential.
3. Apple's not kidding when they say the battery life is ten hours.
4. The iBook store is a bit light on titles. I couldn't download "The Blind Side," which surprised me. However, you can download a Kindle reader for free and access all the Amazon books, so problem solved.
5. I think $30 a month for 3G connectivity is way too much. Mine just hooks up to WiFi.
6. No multi-tasking, which stinks, but I gather this is being fixed. No flash, which also stinks. Apple can get by on this front for the moment, but will be at a competitive disadvantage down the road if they can't figure out how to play nice with Adobe.
7. All in all, I think the IPad is a remarkable entertainment and media device, that is also "good enough" for most on the business front.

I still look forward to the Microsoft Courier, because it fills a completely different need. I love the notion of the "infinite notebook" where you can keep searchable archives of years worth of personal and meeting notes. That is something I need, and I don't think Apple is going in that direction.

They're Protesting the Same Thing

Greece is on the left, Berkeley on the right, both recently. As my brother points out, in the 60s we demonstrated for things like civil rights. Now we demonstrate for more free stuff.