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Blue State Economies Will Soon Crumble – But Will They Take Red States With Them?

January 15, 2021 29 Comments

This article was written by Brandon Smith and originally published at Birch Gold Group

Over the past six to eight months, the U.S. has seen perhaps one of the largest migrations of people based on economic and ideological concerns in almost a century. Not since the Great Depression has there been so many Americans relocating in search of a better life. Today, however, those who relocate seem to be largely conservatives and moderates. There is a very good, multifaceted, reason for this.

One of the best recent explanations for the conservative migration is visible in the near-180-degree turnaround by New York Governor Andrew Cuomo on his draconian lockdown mandates. All of a sudden, Cuomo has announced that New York simply cannot stay closed any longer and that businesses need to reopen quickly.

What could have possibly forced the thick-skulled Cuomo to finally see the light?  I think it has a lot to do with the fact that New York has attempted to distribute millions of doses of the COVID-19 vaccine and they have only been able to give out 30% of them. This means that around 70% of people eligible to get the vaccine in New York are apparently refusing to take it (a smart move in my opinion considering the highly experimental and untested nature of the cocktail). Surprisingly, at least 30% of NY healthcare workers are also refusing to take the vaccine. Cuomo has resorted to threatening hospitals with fines if they do not distribute the vaccines fast enough.

In his latest statement Cuomo is trying to send a message that New Yorkers need to take the vaccine so that a reopening can begin. In other words, “take the vaccine or the economy will collapse”.

I don’t believe Cuomo is mending his totalitarian ways, but at least for now, I think he is realizing what most of us in the alternative economic field have been saying for the past year:  Blue state economies are dying because they are oppressive and this stifles trade and business.

Beyond the business factor and the restrictions on people’s daily movements and activities, the lockdowns and subsequent financial crisis have triggered rising crime levels across the country, but predominantly in blue states and democratic controlled cities.

According to the U.S. Postal Service, New York City alone saw over 300,000 residents pick up everything and leave from March to October. This is an unprecedented spike, an exodus the likes of which New York has not seen in a long time.

On the other side of the country, California is witnessing its own exodus, and it started well before the pandemic struck. In 2019, California saw over 653,000 residents escape the state’s suffocating bureaucracy and high taxes. In 2020, the state has hit its lowest population growth rate in history, even after accounting for babies born. More than 200,000 people left the state than moved in in the past year, and before anyone claims that these people are “liberals” invading red states, even the California media admits they are mostly conservatives seeking to escape the socialist sinkhole.

U-Haul, one of the largest moving companies in the nation, has compiled data on the top states which Americans are moving to during the pandemic. The list is loaded with well-known conservative strongholds and red states, with Tennessee, Texas and Florida at the top.

But what does this mean for leftist states in economic terms?  First, a huge loss of tax revenue, and this is dangerous for blue states in particular. California was projecting a $5.6 billion surplus in January of last year, only to face a $54 billion deficit by August. The state’s net tax revenue fell by 42% from March to May year-over-year, far outpacing losses in the rest of the country. Democratic Gov. Gavin Newsom begged Congress for $14 billion in federal aid, claiming that the government has a “moral and ethical obligation to help the states”.

And this seems to be exactly how states like California are surviving, by stealing tax dollars from people in other states that have been more responsible in caring for their economies.

We often hear about states like California and New York as having GDPs comparable to entire countries. We hear about all the manufacturing and agricultural production, and a couple of years ago, there were even calls for secession in California on the grounds that “orange man bad” and that the state could fiscally support itself “easily.”

Nothing could be further from the truth. What leftist cheerleaders often refuse to mention is the deep and insidious debt problems and deficits blue states suffer from. Looking at a list of the most indebted states in the U.S. in terms of total assets and liabilities, you will find that the vast majority of them are Democrat controlled.

Furthermore, blue states tend to have the highest levels of unfunded pension liabilities. In other words, their public pension obligations are only partially funded and are suffering a net loss. California, Connecticut and Illinois top the list and the only red state that comes close in terms of percentages is Alaska. Red states top the list in terms of the best funded pensions and the lowest debt per capita.

These debts are caused by irresponsible spending policies and endless socialist welfare measures, and as with most socialist systems, they always end up spending more money than they can bring in. They also end up wasting money more than they effectively spend money. This translates to much higher taxes, as blue states refuse to admit policy errors and fix their mistakes. Instead, they punish the citizenry with increased taxation. A list of the highest personal income taxes across the country is dominated by blue states.

Blue states like Illinois also stack the list of highest property taxes.

One might assume that with such high taxation that social welfare programs would be in place to help the needy and to reduce poverty, but this is not the case. California and New York have the highest population of homeless people by far (151,278 in CA and 92,091 in NY). The next highest homeless population is in a red state, Florida, with only 28,000.

Add to this the fact that blue states have been the most lockdown-happy during the pandemic despite the fact that the lockdowns have done nothing to stop the spread of COVID-19, and now you know why people are leaving these places en masse.

This dynamic has led to red states outperforming blue states across the board in terms of economic recovery. Job recovery in red states far outpaces blue states, along with recovery in GDP. As a result, a call has been rising for a “Blue State Bailout”, and with Biden ostensibly entering the White House they may very well get what they are asking for.

The problem is, the amount of bailout money that would satiate the hunger of blue states would have to be in the multi-trillions. As more and more people and businesses leave these places for more free states, it’s inevitable that tax revenues will dry up. And, as leftists raise taxes to cover the deficit even more people will relocate. It is a vicious cycle that will lead to complete dependency on federal dollars for blue states to survive.

Red states, on the other hand, will not be enforcing strict lockdown mandates. In fact, I suspect that even if Biden tries to institute a Level 4 federal lockdown that many red states will defy him and carry on with business as usual while blue states quickly bow and submit. The only practical option is for blue states to ignore the lockdowns and fully reopen, not just for a couple of months, but permanently. Will they do this?  I doubt it.

It is also important to consider at a fundamental level the types of people that make up the populations of red states versus blue states. Blue states have built a culture of dependency and the majority of leftists have no useful skill sets that would allow them to adapt to an economic crisis. Meanwhile, red state culture encourages independence, self-reliance and productivity.

The most likely reaction among blue states or the federal government under Biden will be to try to “redistribute” the wealth and stability from red states to blue states. This could happen in the form of stimulus measures that unfairly benefit blue states. The resulting dollar devaluation and price inflation might hit red states harder because they would not be receiving bailouts to offset the higher costs. In the worst-case scenario, in which a full spectrum financial collapse occurs, we may even see the federal government attempt to redistribute production and manufacturing from red states to blue states in the name of “national emergency.”

There could also be an attempt to stop people from moving away from blue states entirely. We have already seen a beta test for this in California, where legislators are attempting to pass a bill which would legally require former residents to continue paying taxes to the state for years after they leave.

Of course, this would lead to severe resistance from conservatives, but that is a discussion for another time. The bottom line is this: the economic and pandemic policies of blue states have failed miserably. Their only option is to see the error of their ways, become fiscally responsible and remove totalitarian lockdown measures, or, attempt to leech success from the red states like parasites. Which one do you think they will choose?

 

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Brandon Smith

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29 Comments

  • Black Cat January 15, 2021 at 5:17 pm

    Being and feeling like I live literally on the county line or rather as I discussed with my good friend , on the “western version of the Mason-Dixon Line” here in Park county Colorado which I suppose ironically is also along the continental divide, we find ourselves increasingly divided between ideological parties; Boulder & Denver, Summit, Eagle and Pitkin county’s (the liberal cities and liberal resort towns Breckenridge, Vail & Aspen) Vs. all the rest of us deplorable assholes who just do so happen to be the ones who keep the heat on and the plumbing running. I fully understand that there is way more to all this left vs. right B.S. but reality dictates that there is all so absolutely a legit divide about how we as people agree on pretty much everything regarding social structure, etc. I’m not sure how it will all go down, but being we are in the good ol 4th turning, shit will likely get interesting from here on out!

    • Brandon Smith January 15, 2021 at 5:25 pm

      Agreed. People often misunderstand the meaning of the term “False Left/Right Paradigm”. They think it means that there is no left or right. This is simply not so. While many people are on different points on the spectrum from collectivism on the left to individual freedom on the right, the fact remains that there are indeed sides, and people are going to have to choose one or the other sooner or later. The globalists are on their own side. While their collectivist tyranny appeals to leftists, the globalists are just as likely to murder leftists as they are to murder conservatives to get what they want. The leftists are just too stupid to realize it.

      • Joe Shmuk January 17, 2021 at 4:46 pm

        There is absolutely a perception of left V right. It seems innately human to position another in order to know where you yourself stand. But in terms of individual humanity, when considering polarised positions from an internal perspective, few, if any of us would plumb our unconscious selves for a polarised geopolitical position. I believe that internally we base most of our feeling, observations and reactions on tolerance. We each have an internal tolerance meter. It’s vertical not horizontal. So-called progressives, leftists, just keep on pushing the tolerance envelope until so-called conservatives et al blow their tops and clamp down (it’s like a bunch of naughty kiddies going too far and getting a kick in the arse from daddy). It all comes down to how much shit decent people will tolerate (and I suspect decent people are far more tolerant that the self-appointed owners of tolerance/liberalism surmise).

        • Brandon Smith January 17, 2021 at 5:18 pm

          I think it’s a little more complicated than that. Many people are innately intolerant, or they learned from cultural influences to be intolerant. The more fearful people are, the more intolerant they tend to be of other viewpoints. Fear comes from a lack of personal responsibility and merit, a lack of independence and self reliance. Fearful people seek to control others, so do psychopaths. The political left has become a haven for fearful and psychopathic people. The spectrum runs from people who want to control, down to people who want to be free and to be left alone. Conservatives are tolerant to a point, but once that line is crossed, we go to war and we do not stop until the threat is eliminated.

          • Joe Shmuk January 17, 2021 at 5:42 pm

            You nailed it with “people who want to control, down to people who want to be free and left alone.” That’s where our war is.

  • Timmy January 16, 2021 at 12:31 am

    What are your thoughts on a tax strike?

    • Brandon Smith January 16, 2021 at 2:30 am

      I imagine such an idea might gain a lot of steam this year. Not a lot of conservatives are going to be willing to pay taxes to a government that is actively working to destroy them and their values.

      • Timmy January 16, 2021 at 10:02 am

        In a collapse scenario, do you think they would still go after “tax dodgers”?

        • Brandon Smith January 16, 2021 at 1:30 pm

          It depends on the extent of the collapse and how difficult it would be to go after certain people vs. others. If you live in a very red state or county and trying to go after you meant the IRS or feds would have to face off against numerous locals and risk injury, then they might not bother at all. What if there are so many people that are refusing to comply that it made prosecuting anyone pointless? That said, I would not be surprised at all if they did try to arrest at least a handful of people in order to “make an example” and try to scare everyone else into conforming. I have to say, hypothetically, there is very solid grounds for refusal to pay just based on the fact that under Biden the Federal Reserve is probably going to print infinite dollars until they destroy the currency, so collecting taxes would merely be a means to control the population rather than a means to keep the country functioning.

          • luke2236 January 16, 2021 at 7:30 pm

            “and risk injury…” THAT is the crux of the biscuit.
            There is a REASON the Founders added the second Amendment, and it aint for duck hunting.

        • Going Dark Soon January 17, 2021 at 2:11 pm

          I people understood how easy it is to beat the IRS, nobody would pay “taxes”. The IRS is a collection agency, and if they ever come knocking it’s about controlling the burden of proof. Always agree to pay what they can prove you owe with SIGNED documents. They can prove NOTHING because they sign nothing, and neither does anybody that reports to them. And since you agree to pay upon proof, they have no case or controversy to bring to a court.

          Of course, they don’t follow the law so before you do anything else, make sure they can’t touch your assets. A Trust works great for that. A Rockefeller said, own nothing, control everything.

    • Black Cat January 16, 2021 at 7:05 am

      Removal of ourselves from all forms of participation and funding in the rollout of global tyranny is a sound countermeasure. Watch how powerful it becomes.

    • Cricket January 17, 2021 at 6:45 am

      I worry that a tax strike will just cause everyone to be ‘unpersoned’; to be cut off from banking, energy, air/bus/train/uber travel, guns/bullets, followed by lawfare etc. Eventually to be cast out into the streets.

      More likely course of action may ultimately be an ‘Atlas Shrugged’ movement. Where the productive parts of society just stop producing. No taxes follow, legally.

      All of these options would only achieve the desired result if large-scale collective action is taken. Tech companies are going to do (are doing) everything in their power to interfere, divide and rule.

      • Ordinary Joe January 17, 2021 at 9:17 am

        An “Atlas Shrugged” movement may be desirable. Especially since many are no longer producing. I tried to envision this type of movement, but can’t seem to see how it could be implemented within the current structure in order to be effective as outlined in the actual books. In the books, they were able to remove themselves from society and create one for themselves without government interference. So I think that an “Atlas Shrugged” movement would also lead to be “disappeared” (unpersoned).

        I know there has been a movement for sometime to congregate in areas, such as where Brandon lives, in order to cohabit with like-minded people. I also know there has been some desire to move to a state where, with enough of a population swing, the state could be the beacon on the hill for conservatives. The left has been spreading in such a manner as evidenced by their influence in Colorado, Texas, Washington, etc.

        I think secession is probably the most likely alternative. It creates the community with existing infrastructure quickly. Conservatives are not good at changing it from within because of their independent nature. They will come together to deal with perceived injustices, but normally just want to be free (left alone) to live their lives as they see fit. I believe we are currently at the injustices stage.

      • Brandon Smith January 17, 2021 at 12:59 pm

        You could not have a tax movement without a mass migration of conservatives to red states and counties. A tax movement would have to coincide with a secession movement. That way, you could not be targeted individually. All the businesses and people you deal with day to day would be conservative or moderate and there would be nothing the leftists could do about it.

        • forest gump January 17, 2021 at 8:31 pm

          What’s the point of talking about a tax movement, when in fact the GOV, by COG ( continuity of government ), can in fact print ( issue electronically ) fiat to infinity.

          IMHO more relevant is that while all States die, the blue States will get the bacon, the red-states will be slowly bled, until their leaders step forward & convert them to blue believers.

          Now of course red-states gen the food, so in theory the red could hold the food, but in fact the producers want cash, so the food will flow.

          The above will lead to a ‘new republic’ where the resisters will generate their own money, hopefully backed by gold.

          I don’t think the USA is ran on taxing (IRS) since 911, IMHO FIAT to infinity has been the main method of the GOV security state, or COG running to perpetuity. When will it end? Not until the USA-MIL worldwide complex collapses.

          • Brandon Smith January 17, 2021 at 9:23 pm

            You missed the point entirely. A tax rebellion would make a statement that conservatives are no longer going to bankroll their own enslavement; I already mentioned in the article that the government can print trillions in response, but it won’t matter because they will hyperinflate in the process. If you think that wealth can simply be printed out of thin air to save the blue states, you are mistaken. There is always a consequence. In the meantime, red states will be building independent and self reliant localized economies while blue states will be suffering from stagflation and fiscal death. The point is to separate, not just politically, but also economically. And the threat is not a “USA-MIL” complex, it is the globalists that infect most governments around the world.

  • Cricket January 16, 2021 at 2:06 am

    “…the globalists are just as likely to murder leftists as they are to murder conservatives to get what they want. The leftists are just too stupid to realize it.”

    Exactly. Not just the globalists but our current crop of completely bleak, dull and unimaginative elites and oligarchs.

    Consider the response to the China virus; the western world, led by the United States, simply copied Communist China’s (CCP) Maoist tactics and methods without a second’s hesitation. That really says it all.

    Musk, Bezos, Soros, Gates, Zuckerberg, Dorsey, Buffet etc (the list goes on and on and I put Trump in that group too); they and their families spend their lives in isolation anyway, for them this is SOP. So why not lock down and isolate the remaining 7 billion people? In my opinion, these are petty and inhumane wannabe Gods.

    The right is used to persecution and the left is about to get it too, and get it good and hard. Biden, Harris, Shumer and Pelosi are not going to protect them.

  • Alecto January 16, 2021 at 6:59 am

    Blue states have burgeoning black market businesses, because these politicians are creating shortages. Imagine you live in inner city like Minneapolis, or Kenosha, where rioters destroyed your local food market or bodega. When I lived in Chicago it was the norm to stop at the corner store on the way home. Those are gone. Where ya gonna buy food? The burbs? Do d-dash and grubhub deliver to the South Side? Lori Lightfoot is another example of an arrogant fool who believes everyone else is dumber than she is. Like Cuomo, she is trying to get “restaurants and bars” open ASAP! That’s also a 180 from her draconian position earlier this year.

    Allowing politicians of any stripe to run a local, state or national economy always results in shortages, dislocations and massive price increases. Why hasn’t half (or more) of the country learned that?

  • Dennis January 16, 2021 at 2:21 pm

    50,000 Italian Restaurant Owners Plan To Ignore Lockdown

    https://humansarefree.com/2021/01/50000-italian-restaurant-owners-plan-to-ignore-lockdown.html

    “Injustice in the end produces independence” -Voltaire-

  • Greg B. January 17, 2021 at 3:33 am

    I remember when the progressives in California were calling for secession when Trump was inaugerated. It’s a good thing for them they reneged on that idea because they would’ve became a failed state the moment they left. California’s already neck deep in 3rd world levels of squalor as is. Secession would absolutely destroy them.

    One of the reasons I believe they treat the idea of conservative states like Texas seceding with ricidule and scorn is because they know deep down we’d succeed as independent agents while they would fail miserably.

    • Cricket January 18, 2021 at 1:59 am

      Besides which if Cali ever seceded it would be the end of leftist politics in DC. That’s the main reason why it will never happen. Cali buttresses the whole leftist movement. Change Cali, change America.

  • Political Atheist January 17, 2021 at 4:41 am

    Political Atheist
    As a kid going up in the 50s horror movies, especially Dracula were always one of the major draws.
    Fast forward we now are controlled by THE HORRORS OF BLOOD SUCKING POLITICOLS, AND MONEY CHANGERS (BANKERS)
    In the 50s movies the towns people rid themselves of this horror with A STAKE IN THE HEART OF EVIL. FAR MORE EFFECTIVE AND PREFERED METHOD “THE SILVER BULLET”
    SUPERMAN WAS CONCROLLED WITH KRYPTONITE. AS TO, THE BANKERS CAN AND WILL BE CONTROLLED BY THE RETURN OF REAL MONEY SILVER/GOLD.
    Follow your leaders Brandon and whomever. Ad to your arsenals silver coins pre 1965 silver coins. Trade with them, encourage family and friends to do likewise. Say no to the devils currency it is not money anyway essentially wortheless…..
    Kill your Dracula, rid yourself of his power with the silver bullet….

    Anne Rice
    “The vampire is an outsider. He’s the perfect metaphor for those things. He’s someone who looks human and sounds human, but is not a human, so he’s always on the margins.”

    “Give me control of a nation’s money and I care not who makes it’s laws” — Mayer Amschel Bauer Rothschild

    or if you prefer, take your pick

    Permit me to issue and control the money of a nation, and I care not who makes its laws!

  • Dennis January 18, 2021 at 1:16 am

    Rothschild? Even their name is a joke. (Did you know..) They changed their name from Bauer (Farmer) to Rothschild.

    “The Bauers of the Red Shield, which represented their secret blood-based child sacrifices, changed their name to Rothschild (aka “child of the rock, Satan”)”

    source: https://politicalvelcraft.org/2018/12/27/the-hidden-history-of-the-rothschild-khazarian-mafia/

    • Gotheart January 18, 2021 at 8:11 am

      Whoa! WOW! Now we’re talkin’ turkey! Thank you so much! I have been researching these “dots” for a long time. 👍

  • Gauntlet33 January 18, 2021 at 2:33 pm

    Great article Brandon. Yes, the blue/left states can very quickly raise property and sales taxes and bleed their own citizens and the nation by reducing the value of the dollar. And as you said, I too can attest that many people have left for Florida, Texas, Tennessee, Arizona, and I even heard today South Carolina. As for the tax evasion, I like the idea, but the hurt will come if people do so en masse by the quicker devaluation of the dollar, so I’m not sure that’s a way out, though it does send a strong political message.

    Anyway, I previously posted on Brandon’s last article that I believe that Patriots should be “snipers”. But after I finished posting, I realized that I forgot to include a different term, which to me implies the same approach…”guerrilla warfare”. Here’s a short clip from a great article:

    “The government’s many senseless wars have demonstrated the effectiveness of guerrilla warfare against forces superior in every conventional metric: manpower, firepower, and technology. Among tens of millions of potential secessionists, many of them well-armed, there are members or veterans of the military with counterinsurgency experience. They’ve gone to school on guerrillas and their tactics. They’ll likely provide secessionist military leadership once the totalitarians’ war (and they will start it) goes kinetic.” https://www.zerohedge.com/political/gray-curtain-descends-part-2

    [EDITOR’S NOTE: All of this is hypothetical.]

    Basically, I envision Patriots ambushing the enemy (perhaps behind a tree, brush, boulders, etc.) At some point, we may need the intel to know which routes / roads they are likely to take, and to have armed patrols ready to unleash a blitzkrieg hell when they come. Drones could be useful too, and especially if they’re weaponized.

    Also, here’s another great article, which I’ll sum up and say that the author believes that Patriots should do their best to “just get out of the way”, let the rot of the libtard cities burn themselves out, and basically just wait it out while the corrupt system implodes upon itself, and that we should fight “when the coals of NYC and DC are still glowing, and the government has killed off its own constituency groups.” Also, generally speaking, the author sees a bright light at the end of the tunnel and calls it the “Great Opportunity”.

    https://www.theburningplatform.com/2021/01/11/calm-down-and-think-strategically/

    As I’ve posted before, I’m in California and I tend to favor this approach. Specifically, I may be moving to South Carolina soon and start a small farm and then do our best to provide food for ourselves, and if possible, for our neighbors. I’m also hoping that the very small, rural town I chose is away from most of the crossfire.

  • Edward Ignazio January 22, 2021 at 6:33 am

    Great article-Thank you for posting-I live in the People Republic of Massachusetts-(A very blue state)-the state government is counting(praying) for more government bailout to keep the ship afloat as they are missing their tax collection targets big time.

  • Iceey January 26, 2021 at 1:06 pm

    @ Brandon-
    “I have to say, hypothetically, there is very solid grounds for refusal to pay just based on the fact that under Biden the Federal Reserve is probably going to print infinite dollars until they destroy the currency,…”

    No probably about it-we long ago reached the point at which it became mathematically impossible to ever pay off the debt, leaving only 2 choices: Repudiate the debt [politically unacceptable to both the Left and the Right] or inflate the currency to infinity, paying off all obligations in increasingly-worthless “dollars”.
    This is path chosen by every country which has embarked on the inflation journey and passed the 150%+ debt/GDP ratio.

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