“Retreat” Areas may be Hit by automatic US Budget Cuts‏

1) I was just looking at a map showing which USA counties receive the most federal spending dollars per person –in a news article re which areas will be heavily impacted if the US government has automatic tax increases/spending cuts in the event the Democrats and Republicans don’t reach a compromise budget with 2 months.
2) One thing that was striking is that many of the survival retreat areas recommended by James Wesley Rawles are strongly dependent upon the US federal government spending.
See http://msnbcmedia.msn.com/i/CNBC/Sections/News_And_Analysis/_News/_SPECIAL_REPORTS/FiscalCliff/Graphics/fiscal-cliff-and-you-fed-fund-per-capita-county.pdf
or http://www.cnbc.com/id/49885240?__source=yahoo|related|story|text|&par=yahoo
Rawles’ “American Redoubt” recommended areas are here:
3) The impact on those areas will be amplified because of what economists call the “multiplier” — every dollar coming into an area from outside gets passed around 4 or 5 times and hence supports roughly 4 times its weight in economic activity. A federal worker spends his paycheck at  the grocery store, the grocery store worker spends part of the money received from the federal worker at Walmart, the Walmart employee spends his resulting wage buying gas at the local service station,etc.
4) But if the spigot from outside shuts off, the crowbar works the other way –and the local economy shrinks more rapidly than just the amount of reduction in outside money. It seem risky to be in an area dependent upon a government that is $16+ Trillion in debt — especially since inland areas like Montana don’t have any ocean ports giving them access to trading routes with other countries and they don’t have  diversified economies/ resources.   I.e, there are reasons why they have low populations.
 5) Did you know if any areas in Argentina saw this effect after the 2001 crisis?
 -Don Williams
Hi Don,
At times certain areas have been recommended by certain people because they would gladly contact you with retreat brokers that will land them a certain handsome fee for their troubles. Even on small shares per buyer, you’re talking about some serious money being made in what would otherwise be hard to sell, unattractive property.
Then there’s the issue of lack of objectivity. People in general, we all tend to look at things through our own perspective, and the greater the ego, the harder it is to put yourself in the other guy’s shoes. If you happen to suffer a narcissistic disorder, this exercise which involves an amount of empathy is simply impossible to perform.  A person that is independently wealthy, not exactly because of the money he saves by heating with wood or growing his own food, mind you, can afford to pick the place they live in with much greater freedom than someone that has to work for a living and actually needs to find a job or provide clients and customers for himself. For some people homeschooling just isn’t possible because both parents work or because, like myself, believe that an excellent school will provide a better education while we take care of the raising them part at home. In either case, good schools in the area are of great importance. An elder couple that needs constant medical care, like the nice lady that lives across my street, they wouldn’t last a month without constant medical assistance. For people like them, living far from cities where good medical care is available is a bad idea. And guess what, we will ALL be in that position sooner or later.
Then you have this popular idea among survivalists that everyone living in a suburb or city is a complete useless fool while everyone that lives out in the country is a super human of some sort, healthy, fit, educated, good natured and 100% self-sufficient. People living out of government handouts, drunkards, lazy bums that have their homes falling apart with yards full of rat infested junk? Drug abusers, meth labs, you’ll never find none of those out in the sticks. Truth is that there’s that kind of people in cities, suburbs and country, and the same goes for good people we would all love to have as neighbors.
Did you know if any areas in Argentina saw this effect after the 2001 crisis?
People that live in the inner Argentine provinces have a saying, “God is everywhere, but his office is in Buenos Aires”. That is why half the population lives there. Finding work, getting more complicated paperwork done or going to a good university, you have to go to the big city. Argentina may be an extreme case of that, but there’s still a lesson there. With thousands of acres of beautiful and affordable land, why do people still choose to bunch up in nasty Buenos Aires? Because it’s the only place in a 3rdf world country where you can get anything done, its where all the money ends up. The rest of the country is always in a far 2nd place in terms of priority. The power grid needs fixing, water supply, roads, Buenos Aires gets the money first. Its not surprise that you find some of the worse poverty in the more distant provinces.
Don, the problem isn’t just that these places are strongly dependent upon the US federal government spending. The problem is that given their relevance, these will be the first places where that spending is significantly cut.
I’ve explained this behavior before, comparing it to a living organism. When there’s not enough food, a living organism will keep its core alive while sacrificing other non-vital parts. Same thing happens with a country and its government, it will keep its core alive, and same thing will happen in a state level, the capital getting most of the attention so as to keep it going while the smaller the community, the less help it will get.


“Retreat” Areas may be Hit by automatic US Budget Cuts‏ — 3 Comments

  1. Part of the reason for the red shading is that the Feds control so much of the area. Here in Montana, if it’s not an Indian reservation it’s Bureau of Land Management or Forest Service land that surrounds us and must be supported by the federal budget.

  2. Pingback: Week 27 of the Sunday SHTF Summary - Portable Generator | The Home For Survival

  3. JT’s point is a good one in that much of the western US is owned by one government agency or another. One additional points is that the western areas that show up as getting lots of Fed dollars are also very lightly populated so a modest government project has a large per capita or per person impact.

    Also, the idea of a multiplier effect of 4-5 times from government spending is not true, rather the impact on economic growth is actually under 1×1. The reason: areas of high government spending see a significant reduction in true private investment. For example, solar companies got lots of Fed dollars, but few private investors would invest in that area absent the government subsidy. Without continuing subsidies, the solar companies have gone under so the long-term impact was a blip of spending that has now disappeared leaving the affected communities worse off.

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