Inside today’s Daily Journal…

New York City will go first.

The city’s annual budget is now $120.8 billion. That’s larger than the budget of the entire state of Florida, which has nearly three times the population. New York City’s budget is larger than the next 10 biggest American city governments combined.

The city government spends more than $14,000 for every man, woman, and child who lives within the five boroughs.

The city now faces projected budget gaps of $10.4 billion in FY2027, $13.2 billion in FY2028, and $12.4 billion in FY2029.

The response from city leadership? Not cuts. Not reform.

Their answer: A proposed tax on second homes worth $5 million or more – projected to raise $500 million a year, which would cover roughly 3.8% of the looming gap.

It is the fiscal equivalent of bailing out the Titanic with a coffee mug – while also making it clear that wealthy, successful people are no longer welcome in the city.

What do communist do when their plans fail? Blame (and tax) the rich. But even with a budget that’s almost comically bloated, New York’s government still can’t even deliver the basic services that it has promised.

Take schools.

The New York City Department of Education’s budget for FY2026 is $44.6 billion – the largest single-agency budget of any city government in the United States.

When the Citizens Budget Commission calculates fully loaded per-pupil costs – including transportation, pensions, debt service, and central administration – the figure reaches approximately $42,168 per student.

That’s more than most people pay to go to college!

And what are the students getting for their tax dollars? Only 29% of NYC eighth graders are at or above proficiency in math. Only 45% of third graders are proficient in reading.

Does that sound like the kind of school system you’d want your kids to attend?

How is that possible? How can they spend so much money and get nothing for it?

The New York City public school system employs 6,000 administrators.

The New York Catholic school system – which serves roughly one-quarter as many students – employs 24. That is a 250-to-1 ratio, or roughly 62 times more administrators per student in the public schools than in the parochial ones.

And there’s the enormous cost of graft and fraud.

Phase 1 of the Second Avenue Subway – 1.8 miles of tunnel – cost $4.45 billion, or roughly $2.5 billion per mile. Paris builds comparable subway tunnels for $250 million per mile.

Phase 2 – just 1.5 additional miles – is projected at $7.7 billion, or roughly $4 billion per mile. That is 11 times the global average. An internal accountant on one MTA tunnel project found that 200 of 900 underground workers were superfluous – drawing wages while officials could not identify what they did.

The East Side Access project to connect the Long Island Railroad to Grand Central Terminal was originally estimated at $4.3 billion.

It opened 14 years late at a cost of about $12 billion – roughly $7 billion over budget.

But it’s not the fraud … or even the taxes… that will kill you. It’s the people.

In 2024, there were 10 murders on the New York City subway – the most since 2006.

Subway felony assaults hit 579, up 55% from 2019.

Forty-year-old Deloitte manager Michelle Go was pushed to her death in front of an R train at Times Square by a schizophrenic man who had been discharged from a hospital ER before the attack. Debrina Kawam, a 57-year-old woman, was set on fire while sleeping on an F train by an undocumented immigrant living in a city shelter. Ramon Rivera, a homeless man with at least eight prior arrests and a history of expressing homicidal thoughts to police, killed three people in 2.5 hours across Midtown Manhattan — weeks after a judge released him on an open shoplifting charge.

In the year after Michelle Go’s murder, 37 more people were pushed off subway platforms.

Across the broader city, felony assaults reached approximately 29,841 in 2025 – 44% above 2019 levels and the highest since 1997. What if you call the police? Nothing happens: Of 28,329 disorderly conduct calls on the subway in 2024, only 221 resulted in arrest – a 0.78% enforcement rate.

This trend defies national patterns; nationally, aggravated assaults fell roughly 6% from 2019 to 2025. Total reported offenses in NYC reached 590,000 in 2024 – 25% above pre-pandemic levels.

Approximately 2,000 people with serious mental illness cycle through the city’s streets, subways, jails, and hospitals at any given time.

The system has a nickname for the most common outcome: “treated and streeted” – psychiatric patients given mood stabilizers, discharged, and handed a MetroCard to pay for the subway.

And there’s another major factor that no one seems to talk about: the smell.

New York State legalized recreational cannabis in March 2021. The rollout was a bureaucratic catastrophe. While the state’s licensing apparatus lurched through delays and court injunctions, an estimated 2,000 to 8,000 unlicensed cannabis shops opened – against just 62 licensed dispensaries at the time, a 47-to-1 ratio. The state’s legal market captures only about one-fifth of total cannabis sales. In a June 2025 poll, 60% of New Yorkers said they were bothered by the smell of public cannabis smoking.

Living there over the past two years, I can tell you, it’s unbearable. And it’s everywhere you go.

Also since I’ve been there, I’ve been threatened by vagrants routinely. I’d estimate that about 50% of the time I’m walking any distance through the city, I have to deal with a threatening vagrant. They are everywhere. Why? The city now spends $81,228 per unsheltered homeless person per year – up from $28,000 in 2019 – a figure roughly equal to NYC’s median household income.

Despite tripling spending, the unsheltered population rose 26%.

Gee, I wonder why?

An investigation by The New York Times into the city’s 38 mental health shelters found that over four years they produced 50 deaths, 1,400 altercations, 40 rapes, and 40 fires. The State Comptroller found that the Department of Homeless Services “does not publicly report details on expenses in a way that would allow for clear analysis of unit costs, cost effectiveness, or the impact of programs” – meaning nobody can tell whether any of this spending is working. They cannot even track the money, let alone the outcomes.

So… what happens when everyone who contributes to society decides to leave?

New York State’s tax base is a case study in concentration risk. According to the NY Department of Taxation and Finance, 99,404 millionaire filers – 0.9% of all taxpayers – generate 44.6% of all state income tax revenue. The top 200 individuals alone (0.002% of filers) produce 7.7% of total state tax liability. The bottom 50% of filers contribute 0.2%.

In New York City specifically, the top 1% (roughly 41,000 filers) paid 48% of city personal income tax in 2021.

The fewer than 1,000 households who make up the $25-million-plus tax bracket accounted for 73% of all net personal income growth in the city between 2019 and 2021.

The combined top marginal tax rate for a New York City resident earning above $25 million is approximately 51.8% – the highest in the United States. Long-term capital gains for NYC residents are taxed at 38.5%, one of the highest rates in the world. The Tax Foundation ranks New York dead last – 50th out of 50 states – for tax competitiveness.

Florida and Texas charge zero state income tax. The differential is not marginal – it is existential.

The people who are funding this abortion of a city are leaving. Between 2019 and 2023, New York State experienced a net income outflow of $76.7 billion. In the pandemic year of 2020, 6.09% of all millionaire filers updated their addresses to other states – more than triple the rate for average filers. The ultra-wealthy ($25 million-plus) departed at 8.57% in 2021 – the same year New York enacted its biggest income tax hike in decades.

Florida has overtaken New York in the millionaire count.

New York’s share of the national millionaire population has fallen from 12.7% in 2010 to 8.7% in 2022. In the $10-million-plus bracket, New York lost 31% of its national share in seven years. Bloomberg data shows 158 investment firms managing $993 billion in assets exited New York over three years – 104 went to Florida.

Legendary investor Carl Icahn moved Icahn Enterprises to Florida, offering employees $50,000 each to relocate. Elliott Management took its $41 billion to West Palm Beach. AllianceBernstein, a 58-year institution managing $867 billion, completed a full headquarters move to Nashville. Ken Griffin’s Citadel moved to Miami. JPMorgan Chase now employs 32,000 people in Texas versus 24,000 in New York – NYC headcount is down 20% from a decade ago. JP Morgan CEO Jamie Dimon’s April 2026 shareholder letter explicitly warned that the city’s “highest corporate and income taxes” risk driving away businesses and talent.

Pershing Square Capital’s Bill Ackman has publicly estimated that if just 100 of the top earners in finance left NYC, the city could lose up to $10 billion in tax revenue.

On the other side of the ledger: 36.6% of New York State’s population – 7.27 million people – is on Medicaid. 21% of NYC residents receive food stamps. 584,554 New Yorkers – the highest caseload in more than two decades – receive cash assistance, growing at 13% per year. Over 2.2 million NYC residents (26%) live in poverty – twice the national average.

New York is becoming a city of zombies.

The electoral math is simple. Lower-income voters favor the Democratic Party by a 58-36 margin. Renters – the dominant group in NYC – favor Democrats 64-32. In a city where the majority of voters are net beneficiaries of redistribution, they will consistently elect officials who expand those programs, funded by an ever-smaller cohort of high earners who face escalating reasons to leave.

The system is a ratchet. It only turns one direction. And the endpoint is a city of government grocery stores – each costing $30 million to build – frequented by homeless, dope-smoking zombies.

What’s fascinating to me is that I’ve been writing about social and governmental trends for more than 15 years. And even though month after month all of the things I’ve been predicting have happened and even though New York City is collapsing… there’s zero recognition across America that these problems are coming for all of us.

With universal suffrage and extremely progressive taxation, it’s only a matter of time before what’s happening in New York City comes to your hometown too.

America’s incredible 250-year ascent didn’t happen by accident. It happened because of strong private property rights, freedom of speech, and a strictly limited government. It also happened because everyone in America and everyone who worked hard to come to America wanted a chance to work hard and build a life. The people who have come here over the past decade – tens of millions of them – are zombies, not Americans.

Where’s something exceptional happening in the world?

In 2015, El Salvador recorded 6,656 murders – a rate of 106.3 per 100,000 people, the highest on Earth. That is 17 times the global average. In March of that year alone, 16 people were murdered every day. The gangs – MS-13 and Barrio 18 – operated in 247 of 262 municipalities, collected extortion from virtually every business and bus route, and enforced territorial boundaries with the casual lethality of a narco-state. An estimated 100,000 gang members controlled a country of 6.5 million.

Nayib Bukele became president of El Salvador in June 2019. He did not form a commission. He did not convene a task force. He did not write a white paper.

He acted.

From 6,656 murders in 2015 to 114 in 2024. A 98.3% decline. The homicide clearance rate in 2024 was 98% – 112 of 114 cases solved.

El Salvador’s current murder rate of 1.9 per 100,000 is lower than the United States (~5.5), lower than Canada, and lower than every other country in Latin America. The U.S. State Department upgraded El Salvador to Level 1 – Exercise Normal Precautions – the same category as Japan, Germany, and Switzerland, and safer-rated than the UK or France.

The mechanism was blunt and effective: put the criminals in jail, forever.

After a gang killing spree in March 2022 – 87 people murdered in 72 hours – President Bukele declared a State of Exception. Police and military arrested over 91,650 gang members and associates. Prison sentences were raised to 40–45 years. A purpose-built mega-prison, CECOT, with capacity for 40,000, opened in January 2023. Active gang factions fell from 107 to 53. Street vendors, shop owners, and bus drivers stopped paying extortion. Residents walked freely in neighborhoods that had been death zones.

When you remove the boot of organized crime from the neck of an economy, things happen.

GDP per capita rose from $9,667 in 2019 to $13,173 in 2024 – a 36% increase in five years.

Tourism exploded. International visitors grew from 1.7 million in 2019 to 4.1 million in 2025 – a 141% increase. Tourism revenue surpassed $4 billion, reaching 14% of GDP (up from 6.4%). El Salvador surpassed Costa Rica in total international visitors – a country that had been the dominant Central American tourist destination for decades. UN Tourism ranked El Salvador second globally in post-pandemic tourism recovery.

Investment poured in: over $5 billion in 2025 alone. A $1.6 billion Turkish port deal. A new Pacific Airport. A $700 million railway. High-rise construction where gang-controlled slums used to be. Industrial and office space demand exceeds supply by 3:1.

Bukele’s approval rating is 91% – the highest of any world leader, per consolidated polling from Morning Consult, WCIOM, and Gallup. He has maintained above 80% approval since 2019 – “unique in Latin American politics, which is accustomed to leaders’ popularity declining over time,” as international Spanish-language paper El País noted. He was re-elected in February 2024 with 85% of the vote.

In New York City, by contrast, only 34% of residents rate the city’s quality of life as excellent or good – down from 51% in 2017. Only 11% believe the government spends tax dollars wisely. The wealthiest residents – those who fund the system – showed the sharpest collapse: quality of life satisfaction among $200,000 and up earners dropped by nearly half.

New York City has lost $76.7 billion in net income to other states as its most productive citizens flee a 51.8% marginal tax rate. El Salvador is attracting $5 billion a year in new investment because foreign capital goes where it is safe and welcome.

The uncomfortable lesson is this: governance is not about resources. New York has the most resources of any city government in human history. It has produced a $120 billion bureaucracy that cannot educate its children, keep its subways safe, build a mile of tunnel for less than $4 billion, or house its homeless population despite spending $81,000 per person per year trying.

El Salvador had almost nothing – and a president who decided that the first job of government is to protect its citizens from violence. Everything else followed.

The question for New York is whether the ratchet can ever be reversed – can a city where the majority of voters are net beneficiaries of redistribution ever vote for a government that spends less and treats its taxpayers as citizens rather than ATMs?

I’m confident the answer is: no.

My wife and I are relocating to Winter Park, Florida.

Tell me what you think: good, bad, or indifferent: [email protected]

Porter Stansberry
Stevenson, Maryland

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1. Shale drillers save the day. While global gas prices have spiked due to the shutdown of the Strait of Hormuz, shale drillers have insulated the U.S. economy from an energy crunch. With U.S. gas production up 4% year-on-year, abundant supply has kept prices contained at just $2.60 per thousand cubic feet (mcf), while Europe and Asia are paying closer to $20 per mcf. This is not only shielding U.S. consumers from higher energy costs, but it’s also boosting American industry by providing cheap feedstock for producing fertilizers, plastics, and other petrochemicals.

2. Progressive (PGR) reports robust Q1. The leading property and casualty (P&C) insurance provider (and 2023 Complete Investor recommendation) posted earnings per share of $4.80, beating consensus estimates. Net premiums for Q1 climbed to $23.64 billion, a 10% year-over-year increase for March alone, signaling that the company is still capturing market share even as the broader industry slows. Progressive’s efficiency remains industry-leading, maintaining a combined ratio (lower is better) of 86.4% for the quarter – well below its long-term 96% target. Its 36% surge in net income for March suggests that its data-driven systems are allowing it to remain a dominant, highly efficient force in the P&C insurance market.

3. AI increases its debt profile. Big tech is borrowing more: its share of the investment-grade bond index has surged from 1.9% in 2006 to 10.7% today. But the real concentration risk is in leveraged loans, where tech companies have nearly tripled from 5.7% to 14.3% over the same period. That leveraged loan number matters most – it’s heavily weighted toward mid-market SaaS companies most exposed to AI disruption. AI is eating software and debt is now a bigger piece of the pie.

The low-key, chic footwear brand Allbirds (BIRD) – once popular among tech investors and A-list celebs – has lost its luster and thus is rebranding into NewBird AI. Instead of churning out cool wool sneakers – it sold the brand – the company is now piling into high-speed GPUs-as-a-service… also very much in fashion. Shares jumped 6x today on the news.

Tim M. writes:

Porter Comment: Tim —

Over the last year, Venture Global has had a high of around $18 and a low of around $6.

It’s a very volatile stock.

Also, there’s a war in the Persian Gulf.

So, yep, it’s going to be volatile.

Regards,

Porter

Steven M. writes:

Wayne W. writes:

Porter Comment: No – Porter

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