Death spiral states

Forbes magazine published the following article on 11/25/12:

http://www.forbes.com/sites/baldwin/2012/11/25/do-you-live-in-a-death-spiral-state/

The highlights of this article are as follows:

Don’t buy a house in a state where private sector workers are outnumbered by folks dependent on government.  Thinking about buying a house? Or a municipal bond? Be careful where you put your capital. Don’t put it in a state at high risk of a fiscal tailspin.

Two factors determine whether a state makes this elite list of fiscal hellholes. The first is whether it has more takers than makers. A taker is someone who draws money from the government, as an employee, pensioner or welfare recipient. A maker is someone gainfully employed in the private sector.

The taker count is the number of state and local government workers plus the number of people on Medicaid plus 1 for each $100,000 of unfunded pension liabilities.

The second element in the death spiral list is a scorecard of state credit-worthiness done by Conning & Co., a money manager known for its measures of risk in insurance company portfolios.

A state qualifies for the Forbes death spiral list if its taker/maker ratio exceeds 1.0 and it resides in the bottom half of Conning’s ranking.

The list of states in a death spiral:

New Mexico

Mississippi

California

Alabama

Maine

New York

South Carolina

Kentucky

Illinois

Hawaii

Ohio