How's It Going With The High Tax, High Spend, High Debt Model

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Just checking around to see what I can find in the way of the latest data on how it's going with the high tax, high spend, high debt model of how to run a government.

Europe certainly qualifies for that category.  At ZeroHedge today, there is a collection of discouraging recent economic statistics from Europe.  Some of the most relevant:

  • The unemployment rate in the eurozone has now risen to 11.8% – a brand new all-time high.
  • The unemployment rate in Greece is now 26%.   A year ago it was only 18.9%. The unemployment rate in Spain has risen to 26.6%.
    • .The unemployment rate for workers under the age of 25 in Italy is 37.1%; in Spain, 56.5%; in Greece, 57.6%.

    Back in the U.S., Brian Barry at Bloomberg News reports on the contrast of the economic conditions of the blue and red states:

    [L]eaders of both parties . . . should also think about the path of state finances. The prospects should unnerve Democrats, in particular: The 26 states that Obama carried in November tended overwhelmingly to have lower credit ratings than the 24 where he lost.   The most obvious examples are California and Illinois, two big states that are deep-blue politically and deep in the red fiscally.

    Aside from credit ratings, how are the blue states doing versus the red states in economic performance?

    Checking in on Illinois, we find that efforts to get some control over the worst-funded pension system in the country are going nowhere:.  Again, from Bloomberg News:

Illinois lawmakers missed another chance to restructure the worst-funded state retirement system in the nation, officially ending their 2012 session yesterday without acting on measures to shore up pensions.  In failing to deal with a $97 billion unfunded liability that rises by $17 million each day, Illinois risks more downgrades from bond-rating companies, which have urged the state to stem the ballooning deficits.

Meanwhile, down in low tax (and no income tax) Texas, the New York Times on January 8 finds that their big problem is how to deal with a suddenly emerging $8.8 billion budget surplus:

A boom in revenues from sales taxes as well as taxes from oil and natural gas production have given Texas a budget surplus that the state comptroller has estimated at $8.8 billion.

As for California, it's too early to see how the big income tax increases are going to affect things.  My prediction:  badly.