Saturday, November 24, 2012


"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.

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

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