Cheap properties available - Would You Buy In A Banana Republic?
Canary In The Coal Mine: Unfunded Liabilities Have Turned Illinois Into A "Banana Republic"
The state is buried debt, and hasn’t passed a budget in over 700 days. 100% of their monthly revenue is being consumed by court ordered payments, and the Illinois Department of Transportation has revealed that they may not be able to pay contractors (who are working on over 700 infrastructure projects) after July 1st if the state doesn’t pass a budget. To top it all off, the state’s credit rating is one step away from junk status, the lowest of any state. Because of these factors, Illinois may become the first state to declare bankruptcy since the Great Depression.
Governor Bruce Rauner has gone so far as to call his state a “banana republic.”
http://www.zerohedge.com/news/2017-06-23/canary-co...
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 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.
