We should run the country like a business. (H/T – Ruf)

Ruf got this from a friend and thought he would share;

Starting immediately we’ll be selling off the assets of the least profitable states and letting all the citizens go.

These states are first on the block, they all get way more from the federal government than they contribute and are therefore unprofitable: Virginia, Louisiana, Alabama, Kentucky, Mississippi, New Mexico, West Virginia, Alaska and South Dakota.

Selling off the bottom 10 will net 118 billion a year saving before we even consider what we’d get for the assets, although some of them may be tough to sell (2007 figures, source IRS)

What?! You don’t want to run the country like a business any more? I’m shocked!

23 comments ↓

#1 Craig on 07.19.12 at 2:19 pm

Exclude funds given to the Native Americans and the Reservations (to the BIA etc) and South Dakota isn’t a drain on the Federal government. Since we as a nation are required to support Native Americans due to treaties (regardless of where they choose to reside), “selling off” South Dakota result in a massive loss to the Feds.

Also, if we sold off Alaska we would be shutting off a major source of petroleum which would drive prices skyward. Again that would be a massive loss to the feds.

In truth, if we really ran government like a business, we would have to increase the salaries of the President (CEO) and Congress (Executive leadership team) to at least ten times what they are now, we would have to eliminate pensions and convert to 401(k)s, we would force everyone else to buy their own insurance, we would slash costs by defunding the military, social security, Medicare, and any other social program that is seen as an expense rather than a source of revenue, and we would need to outsource most of the services and support people to India, the Philippines, or to China.

I dare say even though it is broke, I’d rather keep it as is rather than treat it like a business!

#2 Justin on 07.19.12 at 3:03 pm

You’re still my favorite but there are probably a couple of those that would work. My college advisor parlayed a series of papers on SS privatization into a role as head of the CEA for W. It wasn’t a bad idea.

Then they gave up on reality and went full bore supply side economics nonsense and he was in a tough spot as he correctly despises that politically convenient theory.

Of course if Americans had invested in the market back then with their pensions where would we be now? It’s hard to answer that, but those of us that have 401(k)s and don’t expect to ever collect SS have a pretty good idea. In my case it’s not nearly as bad as I would have thought. my 401k has tripled since I quit contributing in 1999. Certainly more of a return than SS gives you in it’s theoretical way that invests in nothing.

#3 C on 07.19.12 at 3:58 pm

We now have this lovely Company in SF
http://www.reuters.com/article/2012/07/18/us-capitalone-cfpb-idUSBRE86H0SJ20120718

#4 Justin on 07.19.12 at 4:05 pm

Sioux Falls is the home of subprime credit card lending. This will help the displaced from First Premier, HSBC and Citi.

I don’t see it as a bad thing, I think it’s a positive. As long as we allow payday lending at 1000%+ APR we should feel fine with the thoroughly federally regulated card lenders.

#5 Muqhtar on 07.19.12 at 6:19 pm

I don’t understand the proposal. Is it to literally get rid of this list of states – that is to sever them from the United States itself? Or is it simply to stop giving these states back federal funding because they don’t make the top cut of sorts? I’m sure the Southern states you mention would *gladly* break off and become their own nation. And if memory serves me right they tried that once. And we fought a war to make them come back!

For a long time North Dakotans received back the most in federal funds for every dollar they paid into the Fed. Did they suddenly drop off that list? Where did you get this data from? How recent is it? I’ve done some searching around online and this statistic – amount of federal funding received per $1.00 contributed in federal tax dollars per state – seems to get skewed and skewered everywhere. Nobody’s data is the same. Everyone seems to like to interpret this one however they see fit for their purposes.

I guess on the reverse of this – why don’t the top 10 states that receive the least amount of funding back from the federal government for every dollar they pay in sever themselves from the US? It’s obviously a lousy deal to pay in all this money only for it to be redistributed to supposed slouches like SD and AL.

#6 Justin on 07.19.12 at 6:32 pm

It’s a benefit of the bicameral system that results in us have two Senators with only one Rep. We are proportionally overrepresented.

It is also worth pointing out that non-farmers that make a lot of money in South Dakota don’t have a huge state tax load to deduct which means more people paying federal tax in a given tax bracket. Farmers are different and since they get most of the tax burden here they don’t tend to pay a lot of federal taxes even though they get much of the federal money. But it is hard to blame them for paying most of our bills.

I’d like to see the methodology. That is something we should be closely monitoring and maximizing. If corporate interests have a free for all in this post Citizens United system, we as a citizens of SD should maximize our economic position and take advantage of our constitutional gift.

#7 Justin on 07.19.12 at 6:36 pm

have-* having

#8 Tom H. on 07.20.12 at 12:05 pm

Sell off some of the interstates. We have too many already.

#9 Justin on 07.20.12 at 12:16 pm

I wouldn’t expect to see many people flying to Mt Rushmore or Sturgis.

#10 l3wis on 07.20.12 at 12:16 pm

“And we fought a war to make them come back!”

How dumb was that!?

The south has successfully almost f’d up every presidential election for years. GW Bush comes to mind.

#11 rufusx on 07.20.12 at 3:19 pm

@Justin, th4e problem with investiung the SS funds into the Stock Market was thoroughky explained during that time. Essentially, the massive injection of “guarnteed” invetsment fo the SS funds into the kmarkets would – of course, initially drive the prices of sticks sky high. BUT – there is (as with all things in econonmics) a PRICE TO BE PAID for those high stock prices. It’s called ROI. Since the ROI (typically dividends) would become so low – as a proportion of the price of stock – PRIVATE invetment – would be driven out of the market. Then, eventually, the ENTIRE MARKET would be owned by the SS fund. Nobody else would buy – unless the prices came DOWN sufficiently thjat the investor would see an ROI above other options (meaning the SS Fund would be the loser). It was also calculated (by Wall Street itself) that the ROI that the SS fund might get on invetsing in and OWNING the stock market woud be lower to the approach it currently uses. THAT (and not “suply siders” (and yes I lsathe them everyu bit as much as your econ prof)) was the reason it didn’t happen – It was an economically/financially STOOPID investment idea. Like almost all of W’s ideas.

#12 rufusx on 07.20.12 at 3:20 pm

Please excuse my fat fingered typing.

#13 Justin on 07.20.12 at 5:19 pm

but the entire country has their savings in their 401k and mutual funds and we ALREADY have that effect. The premia returned from stock market investing is already week, but it is still better than the implied return of social security. Also nothing says you have to invest your money in equities. If you are talking long term, it is your smartest move though.

I believe the real problem is that there isn’t money to pay back what people paid in so the young folks would still have to pay some tax for the baby boomers who weren’t able to figure out a political solution to paying their bills and would stay on the old system. You would have to pick an age to make a cutoff. and the people right at the cutoff would get screwed.

#14 Justin on 07.20.12 at 5:22 pm

Two great articles:

http://www.obamaftw.com/blog/taxes/tax-decreases-do-not-increase-revenue

http://www.cbpp.org/cms/?fa=view&id=165

actually every article in that first site debunks the most costly myth ever perpetuated on tax paying citizens (that aren’t in the older generations that got to live on a constantly “stimulated” economy that wasn’t really stimulated much if at all)

#15 l3wis on 07.20.12 at 6:58 pm

Please tell me you are not advocating getting rid of SS. You think the job market and economy is shit now, wait until senior citizens have to start looking for full-time work. Oh boy.

#16 Justin on 07.20.12 at 7:12 pm

I’m saying some people should get the defined benefit they paid into. Basically the older people that have been getting those statements and close to collecting. (Who by the way, probably still have to get jobs if that’s all they have).

Because of the proportion of FICA payers to money collectors in the system, the current social security won’t work for slow flat or negative population growth. Not to mention the baby boom is an outlier birth group. I expect to get nothing from it. There is an imaginary trust fund that means little when you run a constant deficit. They don’t take the money you paid in to pay your benefit they take the money currently paid in.

So I expect to get nothing. In return for ending this and having a chance to actually invest money I would be willing to pay a tax to cover the older folks for a period of time as long as it goes away eventually (like them). In exchange I would like to direct an actual investment which would actually put money in the capital markets which could even be invested in a private business through somebody like Ameriprise.

Some of it won’t be invested well, but nothing creates jobs like invested primary equity capital (which isn’t the same as buying stocks on the secondary market but in the scheme of things it kind of is).

Over the long term I would far rather pay into my own retirement account instead of paying FICA and continuing the current scheme.

#17 Justin on 07.20.12 at 7:15 pm

I guess I’d still have to pay FICA for medicare, but that is the same class of taxes. I want to stop funding Social Security in the long run. It isn’t enough to retire on and I could get a better return on that money.

#18 Detroit Lewis on 07.21.12 at 2:24 pm

Justin, trust me, IDEALISTICALLY, you are correct. But the robber barons and volitale market isn’t good for small investors. Trust me, I found that out the hard way. SS is here to stay, there is no better system to help the working class in retirement. Abolishing the program would wreak havoc on the health insurance system, the job market, f’ck, countless things.

#19 Justin on 07.21.12 at 2:35 pm

I used to work on Wall St so trust me I know. If buying stocks in the secondary market put money in company’s hands rather than into Wall Streets pockets I would be much more comfortable with privatization but I still think it can work, having said that financing Medicare is the bigger fiscal issue.

#20 Testor15 on 07.21.12 at 4:22 pm

Justin, SSI was not ever to be considered as the only retirement program for Americans. It has become the only retirement money source left because of the casino operation called Wall Street. “Greed is Good”

#21 Justin on 07.21.12 at 4:31 pm

Funny, my 401k has tripled in 12 years. What happened to my fica taxes (flushing sound).

People could get better returns at a casino than they do on their fica dollars (but they should not expect to)

#22 Muqhtar on 07.22.12 at 1:20 pm

“How dumb was that!?

The south has successfully almost f’d up every presidential election for years. GW Bush comes to mind.”

I’m sure the South would gladly take its oil, brand-new factories, military bases, warm-water ports, wealth and other small trinkets elsewhere. We can keep Detroit and Gary, IN.

#23 Detroit Lewis on 07.22.12 at 1:45 pm

We can also keep Alaska, the shipping ports of Seattle and the midwest which produces most of the world’s food source.

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