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cause and effect
A Dubious Defense of the Blue Model
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  • QET

    Here’s how they do infrastructure “investment” in Blue Heaven:

    “The state is reeling under a legacy of debt left by the massive project. In all, the project will cost an additional $7 billion in interest, bringing the total to a staggering $22 billion, according to a Globe review of hundreds of pages of state documents. It will not be paid off until 2038.

    “Contrary to the popular belief that this was a project heavily subsidized by the federal government, 73 percent of construction costs were paid by Massachusetts drivers and taxpayers. To meet that obligation, the state’s annual payments will be nearly as much over the next several years, $600 million or more, as they were in the heaviest construction period.

    “Big Dig payments have already sucked maintenance and repair money away from deteriorating roads and bridges across the state, forcing the state to float more highway bonds and to go even deeper into the hole.

    “Among other signs of financial trouble: The state is paying almost 80 percent of its highway workers with borrowed money; the crushing costs of debt have pushed the Massachusetts Turnpike Authority, which manages the Big Dig, to the brink of insolvency; and Massachusetts spends a higher percentage of its highway budget on debt than any other state.

    “The scope of the debt has not previously been calculated, much less publicly disclosed, by the state’s political leaders, including Governor Deval Patrick and his senior transportation officials. The Globe confirmed its calculations in interviews with the state’s financial analysts.

    “The Big Dig saddled us with costs we can’t afford,” said Bernard Cohen, secretary of transportation. “We are grappling with that legacy now. There are no easy answers.”

    “The debt is a big part of why Massachusetts had the highest tax-supported debt per capita in the United States last year. Most of the Big Dig borrowing occurred when cost overruns on the tunnel network skyrocketed in the late 1990s and state officials scrambled to keep the partially completed project afloat.

    “The impact of the debt can be seen in some frustrating and alarming ways.

    “During the last three years, Massachusetts spent the most of any state, by far, 38 percent of its highway budget, on debt payments, according to Globe analysis of federal data. The median is less than 6 percent nationally.”
    http://archive.boston.com/news/traffic/bigdig/articles/2008/07/17/big_digs_red_ink_engulfs_state/

  • Andrew Allison

    California, like New York, Chicago and other pillars of the Blue Train Wreck, is technically bankrupt (http://uscommonsense.org/research/unsustainable-california-the-top-10-issues-facing-the-golden-state-wall-of-debt/). It’s once-vaunted infrastructure is decaying while the State pursues a high-speed train to nowhere, a third of the population is on Medicaid, it’s K-12 schools are among the worst (and most costly) in the nation, etc.

  • f1b0nacc1

    Somehow I believe that he has his causality backwards….big surprise…

  • Jacksonian_Libertarian

    “and the epic failure of limited government”

    It was limited government that made America the foremost economy in the world in just a little over 2 centuries. A look at the growth rates since the imposition of the leftist Blue Model Government shows the momentum of centuries of growth falling, and no new accelerating influence to be found.

  • Anthony

    Kind of dated (complicated narratives are the norm….) but adds more context: http://www.realclearpolicy.com/blog/2014/07/08/where_the-job_growth_is_1003.html

  • FriendlyGoat

    “Why do Hacker and Pierson presume that states’ politics determine their economic fortunes, rather than the other way around?”
    Why would conservative-leaning TAI argue the point since “politics precede prosperity” is precisely the claim made by political conservatives for such places as Texas and the Dakotas? (Never mind oil.) Most recently, the day Donald Trump introduced Mike Pence, he painted Indiana as an economic miracle and Pence as the direct reason. The entire premise for red states wanting low minimum wages, low taxes, low regulation and right-to-work laws is the CLAIM (true or not) that these “business climate” matters will attract better economic fortunes.
    Meanwhile, places like California and New York which have been economic powerhouses for decades seem to know that squeezing individuals until they are not viable customers for much of anything is not the road to progress.

    • Tom

      Or they’ve let their economic success go to their heads. That also happens. (See: American automobile companies in the 1960s and 1970s.)

    • Dale Fayda

      California now has the largest percentage of people at or below poverty level. If you want to see real, hopeless, 19th century poverty, go to Imperial county here in So. Cal or counties in Central Valley, all overwhelmingly Latino and where unemployment levels are still hovering around 20+%.

      See Andrew Allison’s comment above for additional details. Even in the Bay Area, which is essentially a petting zoo for rich white and Asian liberals, poverty abounds at near record levels: http://www.bizjournals.com/sanjose/news/2015/04/02/poverty-rate-still-near-all-time-high-in-bay-area.html, http://www.huffingtonpost.com/2015/04/02/sf-bay-area-poverty_n_6994990.html.

      When you account for the astronomically high cost of living, the situation on the ground is even more dire.

      The largest pocket of working poor in the nation is right here in Los Angeles county: http://www.scpr.org/news/2014/06/16/44747/nation-s-biggest-pocket-of-working-poor-is-in-soca/.

      Even Elon Musk, Mr. Clean Energy, liberal poster boy, elected to build his new battery factory in no-corporate-income-tax, no-personal-income-tax, Republican governor and Republican legislature Nevada. California was never even under serious consideration, with the top three choices being Nevada, Arizona and New Mexico.

      What’s left of heavy industry in the US is more and more concentrated in Red, right-to-work states – fact. I recall giving you a breakdown of US-based auto plants a while back and all but one or two were in Red states.

      Social Democracy, aka the Blue Model is in the process of slow implosion. Its collapse is inevitable, like the dawn – its unfunded liabilities are un-payable, its welfare state is bleeding their budgets dry, their tax rates and absurd regulations and mandates are driving away business at an accelerating rate and its societal solidarity is breaking down fast.

      • FriendlyGoat

        And then there was Arkansas and Mississippi and New Mexico and West Virginia and substantial pockets of poverty and hopelessness in every red state and every blue state.

        • Dale Fayda

          Oh, I’m sure you can see the difference between Arkansas and Mississippi and California, right? The former are largely rural, with very large non-white populations(the base of the Democrat party), which constitute the lion’s share of the poor. They have generally been poor throughout their respective histories, but have making significant strides toward relative prosperity. California, on the other had, USED TO BE solidly middle class; the envy of the nation. However, despite having a benign climate, access to international trade and several high-profile industries, is rapidly sliding INTO poverty.

          Read this again: “If you want to take the really long view, other stats show that the number of people in poverty in Southern California has grown 69 percent since 1990, while the population has only grown 26 percent during that time.”

          Can the same be said about Arkansas, Mississippi? No, it can not.

          New Mexico is Blue and majority non-white – no surprise there. And West Virginia is a special case – its bedrock industry has been purposefully destroyed by the Democrat party.

          • FriendlyGoat

            California apparently does not know how to spread the wealth from its entertainment and tech industries onto its urban ghettos and impoverished agricultural areas. The federal government actually does know how to do that—–if we can keep you from killing it.

          • seattleoutcast

            If you think that giving people money is the way out of poverty, then everybody should be middle class today. The government cannot generate wealth, that is left to the businesses and entrepreneurs. Lifting people out of poverty requires people shift their behavior to such things as staying in high school and women not getting pregnant till married.

          • FriendlyGoat

            Well, I’m all for the public schools doing all they can to keep kids in them through graduation and providing whatever sex education and contraceptives are needed to avoid pregnancy before marriage.
            You’ll see that as a smart-aleck answer—-but don’t forget what you brought up and asked for.

          • Boritz

            All the agricultural areas need to do is plant corn and reap the ethanol benefits. Oh wait. Hillary is considering flip-flopping on that again and reducing those benefits. Actually she has a much better record of consolidating wealth than spreading it.

          • FriendlyGoat

            Your dots are not connecting. Too much a stretch, even for you.

    • Dale Fayda

      Oh, and before I forget…

      http://laist.com/2014/09/19/los_angeles_is_the_poorest_of_the_m.php

      The next to last paragraph is particularly telling:

      “If you want to take the really long view, other stats show that the number of people in poverty in Southern California has grown 69 percent since 1990, while the population has only grown 26 percent during that time.”

  • Alan Blair

    In developed nations, every 10% increase in government consumption of GNP, tends to reduce growth by 1% each year. On an international level, the Blue State model within developed nations results in much lower economic growth. This is outlined in the interesting 2011 paper – IFN Working Paper No. 858, 2011, Government Size and Growth: A Survey and
    Interpretation of the Evidence by Andreas Bergh and Magnus Henrekson See: http://journalistsresource.org/wp-content/uploads/2011/08/Govt-Size-and-Growth.pdf

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