Some Red State/Blue State Indicia

If you took out technologically cutting edge areas like Northern California, the Seattle area, the Boston area and NY City, would the U.S. still be ahead of other industrialized countries?

ChatGPT said:​

That’s an excellent and subtle question — and the answer is probably not, or at least not by nearly as much. The United States’ high per capita GDP is very unevenly distributed, and a relatively small number of superproductive metropolitan areas account for a large share of national output.
Let’s unpack it with some data and reasoning:

1. Regional concentration of output​

According to Bureau of Economic Analysis (BEA) data:
  • The top 20 metro areas produce roughly 50% of U.S. GDP, while housing only about 30% of the population.
  • The biggest contributors — San Francisco Bay Area, Seattle, New York, Boston, Los Angeles, and Washington, D.C. — have productivity levels (GDP per worker) comparable to or exceeding Switzerland, Norway, or Singapore.
  • In contrast, many regions in the South and Midwest have GDP per capita similar to Southern or Eastern Europe.

2. What happens if you remove the cutting-edge metros​

If you conceptually remove:
  • Northern California (Bay Area/Silicon Valley)
  • Seattle
  • Boston/Cambridge
  • New York City (including finance and media hubs)
…you’re removing a disproportionate share of:
  • The innovation economy (tech, biotech, venture capital)
  • Financial and corporate headquarters
  • Elite universities and research centers
  • High-wage professional services
These metro areas might represent 20–25% of U.S. GDP despite housing perhaps 10–12% of the population.
If you take them out, the remaining 90% of Americans would likely have an average GDP per capita closer to $50,000–55,000 (PPP) — roughly in line with Western Europe (e.g., Germany or the Netherlands), rather than far above it.

3. Comparison by region​

Approximate comparisons (PPP basis):
RegionGDP per capita (PPP, est.)Comparable country
San Francisco Bay Area$120,000+Switzerland
Seattle metro$110,000Norway
Boston metro$100,000Singapore
New York metro$95,000Netherlands
Rest of U.S. (non-metro, smaller cities)$50,000–60,000Germany, France

4. Interpretation​

  • The U.S. average is high because of a “superstar city” effect — a small number of ultra-productive regions lift the mean.
  • Without them, the U.S. would still be a large, advanced economy, but its average living standard and productivity would be much closer to Europe’s.
  • In other words: the U.S. leads because of its peaks, not its plateaus.
 
what about if you also removed technological spillovers and federal transfers from those areas to the rest of the country...what would the rest of the country be like

ChatGPT said:​

That’s a very deep and important question — and you’ve zeroed in on something that economic geographers and growth economists debate constantly.
If you remove not only the cutting-edge metros (Bay Area, Seattle, Boston, NYC, D.C.) but also the technological spillovers and federal transfers they generate, the rest of the U.S. would likely look considerably poorer — perhaps closer to Southern or Eastern Europe, or even parts of Latin America — in per capita GDP terms.
Let’s unpack this systematically:

1. What “removing spillovers and transfers” means​

Technological spillovers:
  • Innovations developed in the high-tech metros — software, biotech, logistics systems, manufacturing automation — diffuse nationwide through supply chains and productivity gains.
  • For example, a warehouse in Ohio or an insurance office in Kansas benefits from cloud services, machine learning tools, and management practices pioneered in California or Massachusetts.
  • Take those away, and productivity in the “ordinary economy” would drop sharply.
Federal transfers:
  • High-income regions pay more in federal taxes (especially income and corporate taxes) than they receive in spending.
  • Lower-income states, especially in the South and interior, receive large net inflows through:
    • Social Security, Medicare, and Medicaid,
    • Military bases and defense contracts,
    • Agricultural and infrastructure subsidies,
    • Federal employment (e.g., post offices, parks, etc.).
Without these, regional incomes would diverge dramatically.

2. Estimating the impact​

a. Fiscal transfers​

According to Tax Foundation and BEA data:
  • The “donor states” — CA, NY, MA, NJ, IL, WA — send roughly $1 trillion more to the federal government annually than they receive.
  • The “recipient states” — AL, MS, WV, KY, AR, NM, etc. — receive $1.50–$2.00 in federal spending for every dollar they send in taxes.
Without this net inflow, GDP and disposable income in many of these states would drop by 10–20% immediately, and their already-limited state budgets would collapse.

b. Technological spillovers​

Economists like Enrico Moretti and David Autor estimate that each innovation job in a major tech hub creates 3–5 additional jobs elsewhere through supply chains and consumption effects.
Remove that network, and productivity in the rest of the economy could fall by 10–15% over time.
Industries that depend on frontier technology (agriculture, logistics, manufacturing, services) would lag further behind global standards, and capital investment would dry up.

3. What the “rest of America” might look like​

If you remove both the cutting-edge regions and their fiscal and technological spillovers:
AspectLikely Outcome
GDP per capita (PPP)Falls to ~$35,000–40,000 — roughly Portugal, Czechia, or Greece levels
Industrial compositionMore agriculture, extraction, low-value manufacturing, and local services
Innovation ratePlummets; few local firms doing R&D or exporting high-value products
DemographicsYounger workers and educated people would migrate to remaining urban hubs abroad
Fiscal healthDeep deficits in many states; erosion of public services
Living standardsLower productivity means lower wages, less healthcare access, poorer infrastructure
In short, without those few world-class innovation centers and the redistribution they enable, the U.S. would likely resemble a large middle-income federation with pockets of wealth (e.g., Texas energy, Midwest manufacturing) but a median income much lower than today’s.

4. Historical analogy​

In a sense, this resembles:
  • Italy’s North–South divide: Milan and Turin drive growth; the South depends on transfers.
  • Post-industrial Britain: London’s global economy props up a lagging hinterland.
  • The U.S. difference is only that its frontier cities are so enormously productive that they lift the national average to world-leading levels.

Bottom line​

If you took away both the frontier metros and the fiscal and technological flows they generate:
The “rest of America” would likely be a middle-income country — comfortable by global standards but no longer rich by OECD benchmarks.
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would there brain drain from the remaining areas of the country

ChatGPT said:​

Yes — and quite dramatically.
If you remove the high-tech and high-wage coastal metros and the technological and fiscal linkages they sustain, you would almost certainly trigger a massive and sustained brain drain from the remaining parts of the United States. The logic is both historical and structural. Let’s break it down carefully:

1. Why brain drain would accelerate​

a. Loss of high-wage, high-skill anchors​

  • The cutting-edge metros are magnets and incubators for talent — they host elite universities, major research hospitals, and innovation-intensive firms.
  • Remove them, and you erase the core demand for scientists, engineers, designers, financiers, and advanced service workers.
  • Skilled workers in the interior — say, graduates of Purdue, Georgia Tech, or Michigan — would now look abroad (to London, Toronto, Zurich, Seoul, or remaining global hubs) for opportunity.

b. Collapse of local opportunity ladders​

  • Many well-paid professional and technical jobs in non-metro areas depend indirectly on those coastal hubs — via supply chains, contracts, or technology diffusion.
    • Example: A robotics supplier in Ohio or an analytics consultancy in Colorado exists largely because Silicon Valley firms or Boston startups buy from them.
  • Once those hubs vanish, the ecosystem of skilled employment thins out, leaving fewer reasons for educated young people to stay.

c. International emigration​

  • The U.S. would no longer be the undisputed magnet for global talent if it lacked its frontier innovation centers.
  • Instead, you’d likely see two flows:
    1. Domestic outmigration of skilled Americans to Europe, Canada, or East Asia.
    2. Collapse in skilled immigration, since the main draw (cutting-edge research and startup culture) would be gone.
The combined effect: the rest of the country gets older, less dynamic, and increasingly reliant on lower-productivity sectors.

2. Empirical analogues​

You can see this pattern in several historical and international precedents:
CaseWhat happenedResult
U.S. Rust Belt (1970s–2000s)Manufacturing and R&D left Midwest industrial centersYoung professionals left; population stagnated; “aging-out” economies
East Germany (1990s–2000s)Industry collapsed after reunificationPersistent outmigration of youth; productivity gap remains decades later
Southern Italy (post-1950)Industrialization concentrated in the NorthChronic brain drain; ongoing dependency on transfers
Post-Brexit U.K.London retains tech/finance; regions lose EU-funded growthNet migration of graduates to London or abroad
Each case shows that when a region loses its innovation hub and fiscal anchor, skilled people don’t stay to rebuild — they leave.

3. Demographic and social consequences​

  • Aging and shrinking populations in interior states.
  • Falling college enrollment as returns to higher education decline locally.
  • Local political backlash: resentment toward remaining “globalized” enclaves abroad or federal authority.
  • Reduced fertility rates: educated young adults leave, lowering the reproductive-age share.
Over 10–20 years, this would produce a dual economy: a stagnant, low-growth interior with low innovation, and external migration networks funneling skilled Americans elsewhere.

4. Long-run equilibrium: the “Argentina scenario”​

If the frontier metros vanished and spillovers ceased, the U.S. could evolve into a country resembling Argentina after 1930:
  • Still educated, resource-rich, and middle-income.
  • But increasingly isolated from the world’s technological frontier.
  • Recurrent cycles of emigration, capital flight, and populist politics as skilled people exit and the tax base erodes.
In short: the absence of frontier regions would set off a self-reinforcing brain drain spiral.

Bottom line​

Yes. Without the innovation hubs and their spillovers, the remaining regions would experience a large and persistent brain drain, losing both domestic and foreign talent. Over time, this would entrench a middle-income equilibrium — comfortable but stagnant — much like southern Europe or Argentina, not like today’s high-productivity United States.
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nsacpi said:
And other areas lag behind cuz that's just their fate and nuttin they can do about it.
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Nah... Just the other areas weren't blessed that the early America didn't choose them to establish financial and tech dominance.

It takes a lot of time to.undo the dominance of California and new York that republicans built. But rest assured, its happening. Let's ask our robot friend to compare the change since 1960s

To rank the changes in GDP rankings for California, New York, Texas, and Florida from 1963 to 2024 relative to each other, we can evaluate their progress based on the shift in their state GDP rankings and the growth in their economic output. The key metrics are:

1. **Change in Rank**: How many positions each state gained or lost in the U.S. state GDP rankings.
2. **GDP Growth Magnitude**: The relative increase in GDP (adjusted for inflation or nominal terms) to contextualize economic expansion.
3. **Contextual Factors**: Population growth, sectoral shifts, and economic drivers to explain the changes.

### Step 1: Change in GDP Rankings (1963 to 2024)

| State | 1963 Rank | 2024 Rank | Change in Rank (Positions) |
|-------------|-----------|-----------|----------------------------|
| Florida | 14th | 4th | +10 |
| Texas | 7th | 2nd | +5 |
| California | 2nd | 1st | +1 |
| New York | 1st | 3rd | -2 |

- **Florida**: Jumped 10 spots, the largest gain, from 14th to 4th.
- **Texas**: Gained 5 spots, moving from 7th to 2nd.
- **California**: Gained 1 spot, from 2nd to 1st, taking the top position.
- **New York**: Lost 2 spots, dropping from 1st to 3rd.

### Step 2: GDP Growth Magnitude

To compare economic growth, we can estimate the proportional increase in GDP from 1963 to 2024. Using 1963 GDP in chained 2017 dollars and 2024 nominal GDP (converted to approximate real terms for consistency), we calculate growth factors. Since direct conversion requires deflators, we’ll use nominal 2024 figures and approximate real growth trends based on available data.

| State | 1963 GDP (chained 2017 $B) | 2024 GDP (nominal $T) | Approx. Real Growth Factor* |
|-------------|----------------------------|-----------------------|-----------------------------|
| California | $57.2 | $4.1 | ~30–35x |
| Texas | $32.3 | $2.7 | ~40–45x |
| Florida | $23.4 | $1.65 | ~45–50x |
| New York | $64.7 | $2.3 | ~20–25x |

*Note: Growth factors are approximate, as 2024 nominal GDP isn’t directly comparable to 1963 chained 2017 dollars without precise deflators. Estimates use historical GDP deflators (~6x from 1963 to 2024) to ballpark real growth.

- **Florida**: GDP grew ~45–50x, driven by population growth (4.95M to 22M, ~4.4x) and tourism/real estate booms.
- **Texas**: GDP grew ~40–45x, fueled by population growth (9.6M to 31M, ~3.2x), energy, and tech diversification.
- **California**: GDP grew ~30–35x, with population growth (15.7M to 39M, ~2.5x) and tech/entertainment dominance.
- **New York**: GDP grew ~20–25x, slowest due to modest population growth (16.8M to 19.8M, ~1.2x) and outmigration.

### Step 3: Ranking the Changes Relative to Each Other

To rank the states’ changes, we weigh **rank improvement** (primary metric, as it directly reflects relative position shifts) and **GDP growth** (secondary, to capture economic scale). Contextual factors like population and sectoral shifts provide nuance.

1. **Florida (1st)**:
- **Rank Change**: +10 (14th to 4th), the largest climb.
- **GDP Growth**: ~45–50x, highest among the four, reflecting massive economic expansion.
- **Context**: Florida’s leap was driven by population surges (retirees, migrants), tourism (Disney World opened 1971), and real estate. Starting from a lower base (14th), its relative ascent is remarkable, overtaking industrial states like Illinois and Pennsylvania.
- **Why #1?**: Largest rank gain and highest proportional GDP growth.

2. **Texas (2nd)**:
- **Rank Change**: +5 (7th to 2nd), significant but less than Florida’s.
- **GDP Growth**: ~40–45x, slightly below Florida but still massive.
- **Context**: Texas capitalized on oil booms, tech growth (Austin), and population growth. Its higher starting rank (7th) meant less room to climb but a bigger absolute GDP today ($2.7T vs. Florida’s $1.65T).
- **Why #2?**: Strong rank gain and GDP growth, but Florida’s lower starting point and larger rank jump edge it out.

3. **California (3rd)**:
- **Rank Change**: +1 (2nd to 1st), modest but significant as it claimed the top spot.
- **GDP Growth**: ~30–35x, robust but lower than Florida/Texas due to a higher 1963 base.
- **Context**: California’s tech revolution (Silicon Valley), entertainment, and trade made it a global leader. Its smaller rank gain reflects its already high position in 1963.
- **Why #3?**: Smallest rank gain, though its absolute GDP ($4.1T) dwarfs others.

4. **New York (4th)**:
- **Rank Change**: -2 (1st to 3rd), the only decline.
- **GDP Growth**: ~20–25x, lowest due to slower population growth and economic shifts to Sun Belt states.
- **Context**: New York remained a financial powerhouse but faced outmigration and high costs, losing ground to California and Texas.
- **Why #4?**: Only state to lose rank, with the slowest GDP growth.

### Final Ranking of Changes (1963–2024)

1. **Florida**: Largest rank gain (+10), highest proportional GDP growth (~45–50x).
2. **Texas**: Strong rank gain (+5), near-top GDP growth (~40–45x).
3. **California**: Modest rank gain (+1), high but not top-tier GDP growth (~30–35x).
4. **New York**: Rank decline (-2), lowest GDP growth (~20–25x).

### Notes
- **Sun Belt Surge**: Florida and Texas exemplify the Sun Belt’s rise, outpacing California and New York in rank improvement and relative GDP growth due to migration and diversification.
- **Starting Points Matter**: Florida’s lower 1963 rank gave it more room to climb than Texas or California. New York’s fall reflects its peak position in 1963.
- **Absolute vs. Relative**: California’s absolute GDP ($4.1T) is unmatched, but relative change favors Florida and Texas.

Data: BEA for 1963 (chained 2017 dollars) and 2024 nominal GDP. Population from Census Bureau. Growth factors are estimates due to deflator complexities.

...

What will it look like in 50 years? I have a hunch
 
But California and New York are very fortunate that great men, who would abhor their policies, established entrenched advantages in their states long before they are being deteriorated today.

NYC is about to elect a communist, for example. Freeze the rents!!
 
nsacpi said:
Are they? Like other states they have to balance their budgets.
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Yeah thats true. They came up around $70B short last year despite those amazing per capita gdp numbers.

Now they gotta cut services like firefighting

Meanwhile their homeless population continues to explode along with their residents fleeing

A truly dominant force! Don't forget to unplug your toaster and too bad for you people who lost your home in a fire a year ago.
 
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