Is Your State a Socialist State?

States within our Federalist Society can act very differently from one another, for example, one State can allow same sex marriages while another can totally ban it then we sprinkle in a bit of the Federal Government and the Full Faith and Credit Constitutional Provision to make it all that more confusing.

What does this have to do with a Personal Finance Blog? CNBC recently published a blog post titled, The Most Socialist States in America where they

measured total expenditures as a proportion of total economic output to compare the size of the public sector in each state. Using recently released 2009 state gross domestic product figures from the U.S. Bureau of Economic Analysis and total state expenditures for fiscal year 2009 from the most recent report of the National Association of State Budget Officers, we have come up with the 10 most socialist states in America.

Is your State a Socialist State?

CNBC does all the hard work researching public expenditures as compared to the GDP output of that particular state.

10. Rhode Island – 15.9%

9. Hawaii – 17.8%

8. Arkansas – 18.1%

7. Wyoming – 19.0%

6. Mississippi – 20.2%

5. New Mexico – 20.7%

4. Vermont – 21.0%

3. Alabama – 27.4%

2. Alaska – 31.3%

1. West Virginia – 32.1%

Wow! West Virginia’s government spends nearly one-third of GDP! I am shocked that CNBC didn’t research further to compare this to some Countries.  With quick google skills I was able to find that United Kingdom’s Public Expenditure to GDP was 44% in 2010.  I am curious how this would compare to say the USSR in 1985?  I think what I am most shocked about is the fact that some States are missing – California, New York and Mass in particular.

18 Responses to Is Your State a Socialist State?

  1. MC says:

    Interesting! The ones that champion most against socialism are the ones that are most socialistic! But then Palin doesn’t read the newspaper!

  2. Hum, interesting, both for the states that weren’t included, and the states that were. I almost certainly would not have put Alabama or West Virginia in the top three. (Alaska, given the size of the state, the relatively low population, and the amount of national forestry land, amongst other factors, doesn’t really surprise me that much.) I’d like to see more about what the states are spending this money on, whether it’s things like infrastructure or more like social programs, but perhaps in another article.

    • Evan says:

      That is actually a really interesting idea for a post – Infrastructure vs Social programs. It would take me way too long to research but maybe we can look at a few different states.

  3. Doable Finance says:

    Alaska is a surprise. That’s quite opposite what Palin is preaching…

  4. Kris says:

    I am not in a Socialist state, which I find shocking as I am surrounded by socialists!

  5. helio says:

    West Virginia would show a higher rate of government spending because the poverty rates are so high there. According to the USDA (http://www.ers.usda.gov/data/povertyrates/), 17.4% of West Virginians live in poverty.

    Poor folks have more and higher healthcare costs; they need food handouts; they need more social services; the women and children are more likely to be abused and so to need shelters and social workers. Crime rates are often higher among the poor, requiring more police, more courts, and more jails and prisons.

    It’s not cheap to be poor.

  6. It depends on which measure you use. Of course Alaska is high on the list – virtually nobody lives there and there’s very little output to boost GDP number. A better “socialist” measure might have been what proportion of constituents consume the highest proportion of funds from welfare or some other measure that says something about the net consumption of actual “social” dollars broken down by category.

  7. IIW says:

    Well USSR by definition would be 100%, no?

    A good measure of how socialist a state is can also be how many services are provided exclusively by the public sector, or subsidized by the public sector. It’s kind of hard to compete if your public competitor has marginal costs of $0.

    • Evan says:

      I am not sure if USSR would have been 100%…while theoritically you makes sense weren’t there “rich” people that came out when the country fell?

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