State debt

Many states in the US are facing long term debt problems which are adding to the cost of living and causing people to move to states that are not affected by this. A good example is Illinois. For more than 50 years state workers watched their pension benefits grow and the state failed to prepare. As the population ages and more people retire the problem gets worse. The state then has to raise taxes to cover the debt which means young working people will leave the state leaving fewer people to tax. Thus, taxes must be raised again and more people leave and leads to a death spiral. Illinois is trapped in the worst pension crisis in the nation. The state’s five pension systems carry about $144 billion in unfunded liabilities. Illinois families pay the highest effective property taxes in the country, with most of those dollars being spent to keep up with overpromised pensions rather than to create better schools, safer streets or improved services. In the past Illinois has diverted pension funds into the general fund. Illinois lost a congressional seat in the 2020 census and is scheduled to lose another seat in the 2030 census. This means fewer federal dollars coming in. New York and California are in similar situations. It is easy to hand out benefits today that you don’t have to pay for until later but later has arrived.

Time and money

Financial advisors often speak of the miracle of compound interest and use an example to illustrate the point, to encourage young people to save early. The first person, starting at age 25, saves $1,000 per year at 5% interest for ten years at which time he has $12,577 and then he lets that accumulate at 5% for the next 20 years and has $33,066. The second person saves $1,000 per year for 20 years starting at age 35 and in 20 years has $33,370. The second person set aside $20,000 and had only $300 more than the first person who set aside $10,000. The moral is to start early.

Migrants

The latest figures show that during the Biden years, 8 million illegals crossed the southern border along with 1.5 million got a ways. About 40% of these paid coyotes to help them and the cost varied by location. From Cost Mexico 7000 to 10000 Central America 16000 to 18000 Asian 40000 to 75000 If the average was $12,000 that comes to over $100 billion dollars. While the border patrol spent time on the illegals there was less time to interdict drugs and OD’s increased as did the number of drugs that were missed by border patrol. Many of these migrants were convicted felons and 300,000 children became unmonitored, meaning lost. The government approved $170 billion to deport illegals and the process caused protest across the country. There were many reasons why these migrants were allowed entry but one of the most important is that US citizens were concerned about the safety of the migrants.

Income gap

As the income gap becomes wider the cry to raise taxes on the rich becomes louder. The top 20% earn an average of $300,000 while the bottom 20% earns only $18,000. The top one percent earns $750,000. Most people see a difference between a person who starts a new business and earns a high-income vs those who work for a company and earn a big salary. The average salary for a CEO in the top 500 companies is $20 million per year. When the CEO salary is high then the underling VP’s get higher incomes. Salaries include base pay plus bonus and are tied to performance (stock price).

China

Modern day China had its beginnings in 1978 when Deng Xiaoping became leader. This followed the revolution under Mao Zedong that killed 40 million plus another 40 million who died of hunger between 1949 and 1976. This type of government called Maoism was revolutionary communism, emphasizing peasant led insurrection to transform society to agrarian socialism. The goal was that everyone was equal in all ways and this appealed to the poorest of the poor. After Mao died, Deng Xiaoping took control and opened up the economy to a quasi-free-market business system called party-state capitalism which allows individuals to thrive. The per capita GDP which had hovered around $100 per year during Mao’s time began to rise doubling by 1982 and doubling again by 1992. When China entered the WTO in 2000 the per capita GDP was at $1,000 and rose quickly to $12,000 by 2020.

16th

The 16th amendment was ratified in 2013 and it allowed the federal government to tax income. Prior to that the federal government got income from tariffs and excise taxes (liquor and tobacco). The citizens felt that these taxes fell mostly upon the poor working people and they saw the progressive income tax as way to shift the burden to the rich. The result was that within four years the income tax replaced tariffs and excise taxes. The first tax brackets were one percent of income over $3,000 and up to 6% for higher earners. At that time the average family income was $700. Thus, the new income tax only effected 3% of the population.

GM stock

Mary Barra became CEO of GM in 2016, a few years after the government had to bail out the company through a Chapter 11 bankruptcy. Her salary was $22.6 million and she pushed the company to develop electric vehicles. In 2025 the company had to write down $7.6 billion in charges due to a slump in EV demand. Then in early 2026 they recorded another $9 billion write downs because of EV’s. She is still CEO and her salary has increased to $29.5 million. Here is a quote from the beginnings of the EV switch. General Motors CEO Mary Barra has heavily promoted electric vehicles (EVs), positioning them as GM's "North Star" and the company’s long-term "end game Mary Barra remains CEO of General Motors despite significant EV-related costs primarily because she has delivered record financial performance for the company overall, driven by high-profit gas-powered trucks and SUVs, and has maintained strong investor confidence through stock buybacks. The keyword is buybacks. This strategy has propelled GM stock to all time highs reaching $80 by the end of 2025. The profits could have been much higher without the write downs but keeping the stockholders happy is the name of the game.