Eleven states made Forbes' list of danger spots for investors including
California, New York, Illinois, and Ohio. They warned (and with the
cliff it is even more critical) - if you have muni bonds in these states
- clean up your portfolio; if your career takes you there - rent, don't
buy!

Two factors determine their list of 'fiscal hellholes'. The first is
whether there are more takers (someone who draws money from the
government) than makers (the gainfully employed). The second is a state
credit-worthiness score (via Conning) based on large debts,
uncompetitive business climates, weak home prices, and bad trends in
employment.

Conning rates North Dakota the safest state to lend money to,
Connecticut the most hazardous. 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. See below for the 11 states to avoid
- no matter what Bob Toll, Larry Yun, Bob Pisani, or Alexandra Lebenthal
tells you...

(as will be stated further down - federal employees are not included in
the count of "takers")

========================

Number 11 - Ohio Taker ratio: 1.00
The battleground state has a fiscal standoff between takers (people
collecting welfare, a government salary or a government pension) and
makers (private sector employees).

Number 10 - Hawaii Taker ratio: 1.02
Dark clouds over Waikiki Beach: Hawaii has slightly more takers than
makers.

Number 9 - Illinois Taker ratio: 1.03
Dubious ex-gov Rod Blagojevich personifies what's wrong with this state:
Too many goodies promised to insiders. Unfunded pensions contribute to
the balance of 103 takers to every 100 makers.

Number 8 - Kentucky Taker ratio:1.05
Twilight in Lexington. People drawing from government slightly
outnumber people chipping in with private-sector jobs.

Number 7 - South Carolina Taker ratio:1.06
Riptides on Folly Beach.

Number 6 - New York Taker ratio: 1.07
Manhattan still has a vibrant financial sector. Manufacturing there is
extinguished. Causes: taxes, unions, regulations and cheap apparel
workers abroad.

Number 5 - Maine Taker ratio: 1.07
This is a state with a beautiful coastline and a ratio of 107 drawers
from the public fisc to every 100 contributors.

Number 4 - Alabama Taker ratio: 1.10

Number 3 - California Taker ratio: 1.39
California is generous to a fault, at least to state employees and the
needy. To private sector employees, who are outnumbered, it is not so
hospitable.

Number 2 - Mississippi Taker ratio: 1.49
The state ranks second to worst on the list of states burdened by a high
ratio of takers (welfare recipients and state employees) to makers
(private sector workers).

And The Worst State to live in or lend to is...

Number 1 - New Mexico Taker ratio: 1.53
In our taker/maker ratio, federal employees are excluded from the taker
count since their cost is not borne locally. That doesn't save this
state from having the worst ratio in the nation.

As Forbes advises:

-----------
To lend money to California, Illinois or the other nine states perched
on the precipice requires a leap of faith. So does buying a house in
those locales. Don’t count on a property tax limit to protect your
home’s value. If other taxes are high enough, there won’t be any buyers.
-----------

http://www.zerohedge.com/news/2012-1...-spiral-states