Forbes Magazine calls New Mexico a 'death spiral' state
Posted at: 11/30/2012 5:56 PM
Updated at: 11/30/2012 6:10 PM
By: Stuart Dyson, KOB Eyewitness News 4
New Mexico is at the bottom of yet another list, and this one has a grim-sounding name. Forbes Magazine calls us a "death spiral" state.
Forbes lists our state as one of eleven states whose economies are at high risk of going into a tailspin - a death spiral.
The list includes California and New York, but New Mexico is rated the worst of all. It's because the state's economy has the highest share of government workers, retired government workers and people on welfare. For every New Mexican working in the private sector, there are one and a half other people depending on the government.
"We have the national laboratories here, and the great support we get from our military bases," John Garcia, Economic Deevelopment Director for the city of Albuquerque, said. "The fact is we do have to diversify our economy and leverage some of the great assets that we have. The Forbes story surprised us, surprised and disappointed me a little bit."
The Forbes article advises business people not to invest anything in death spiral states because taxes will get too high in order to support all of the people who depend on the government.
The math is pretty simple. Say you have a company with 100 employees. If you move to New Mexico they will support 150 other people. Over in Texas they would support only 82.
"Don't buy a house in a state where private sector workers are outnumbered by folks dependent on government," Forbes advises its readers. "Be careful where you put your capital. Don't put it in a state at high risk of fiscal tailspin."