As a life-long resident of California, I should like to say that if this is where the rest of the country is headed, then the Republic is doomed. Adopting the policies of California will bankrupt any other state in the country as it has this one. If this be the future, then we as a nation are headed straight off a cliff.
Well, Silicon Valley is in good shape anyway. It still produces things, unlike most of the rest of the country. Hollywood is likely to keep ticking, too, and I don't see the wine country having much trouble either. Meanwhile, the state is a pretty damn good place to grow tasty, nutritious fruits and vegetables.
As a California resident, all this doom and gloom has struck me as utter nonsense. California has especially noticeable problems because it is such a huge and dynamic economy. So perhaps it reacts to U.S./World economic conditions in an especially intense manner. But this is something like a healthy immune reaction in my opinion. California will get over it, and it will be stronger in the end.
Perhaps I sound too infatuated with California. Well, come here and see for yourself. It almost makes me feel patriotic---for California, that is.
I agree with you that the state of California is, all things considered, not doing too badly, and it looks as though it will be doing better in the near future. I think that the original commenter was referring to the government of the state of California, which is in serious fiscal trouble. And it looks as though the state government's problems are going to be exacerbated in the future by the tendency of the state legislature for the last several years to "solve" any fiscal problems with temporary fixes and postpone real solutions. The state itself certainly still has a very bright future, but unless the legislature makes some drastic changes in the near future, the state government's future looks very troubled. "California" and "the government of California" are two very different things, and it's important not to conflate the two as often happens in these "California is going down the shitter" debates.
Something else to consider when looking at all the doom and gloom around California is the relative income of the average person in California vs. the rest of the US.
Median Household Income
California $61,021
United States $52,029
Personal per capita income
California – $33,749
United States of America – $31,632
Taking the population 35,893,799 of California * the income gap ($33,749 – $31,632 ) = 75,987,172,483 call it 76 billion per year.
So yes they had a state budget gap of about 1/3 of the extra per person income vs. the rest of the country. But the idea it's bonds or IOU's became worthless is silly.
Median income tends to reduce the apparent income gaps. If you look at the simple average, California makes a lot more money than the rest of the country on average. But they solved the problem by reducing spending and not taxing people more. http://online.wsj.com/article/SB124814401981267445.html
PS: I expect USA to do the same thing, a minor tweak to our spending and taxes can quickly stop deficit spending.
PS: I expect USA to do the same thing, a minor tweak to our spending and taxes can quickly stop deficit spending.
The Congressional Budget Office predictions were for the combined deficit for the next 9 years to be $9.27 trillion, and half of that from new spending. Those "tweaks" you are counting on to stop deficit spending don't seem to be so minor, and aren't even going in the right direction.
Also breakeven is having the national debt grow as fast as inflation even though CBO considers that a deficit. 12 trillion * .03 = 360 billion / year.
PS: There is still a gap but doing things like increasing the SS minimum age by 1 year and cutting back on defense spending might hurt but they don't exactly break our society. Next up remove the tax break on charitable donations.
So, then, the "minor tweak" you are relying on is for the U.S. Government to pull out of Iraq and Afghanistan tomorrow? I don't see any indication of that happening.
When the government actually puts any of those ideas into practice I'll be elated. Until then it's nothing but fantasy, and sure as heck no reason to expect that our deficit spending is under control.
The US federal government is a long way from a true crisis and without that impetus it's far easier for politicians to keep spending silly amounts of money. However, when looking at budget projections you need to realize there is no mandatory spending. “Fixing” SS seems like a deal breaker but we have already increased retirement age with few real grumbles. In the past we drastically cut defense spending with few problems. And despite all the fear pulling out of Vietnam was hardly the end of the free world.
So, yes, I think we will pull out of the middle east within 10 years but a few trillion her or there is not going to break the US economy assuming the government can keep paying such low interest rates. The important thing is adjusting future spending so we can keep those low interest rates.
I did, for a few years, and it appeared even crazier up close.
Living there only made the insanity of the "creative" public spending all the more obvious to me, but then I don't claim to be an expert.
However, I am close to a Central Coast native who happens to have a career in California government finance - when she says the county and state finances are completely screwed and incompetently handled, I give that opinion a little weight.
microchips, freeways, blue jeans, tax revolts, extreme sports, energy efficiency, health clubs, Google searches, Craigslist, iPhones and the Hollywood vision of success
So much bullshit, any intelligent person will have stopped reading immediately. TIME seals its status as the worst newsweekly.
microchips
From wiki:
The idea of an integrated circuit was conceived by a radar scientist working for the Royal Radar Establishment of the British Ministry of Defence, Geoffrey W.A. Dummer (1909-2002), who published it at the Symposium on Progress in Quality Electronic Components in Washington, D.C. on May 7, 1952.[1] He gave many symposia publicly to propagate his ideas.
freeways
Hitler.
blue jeans
Strauss came from California, blue Jeans did not. Again, see wiki.
tax revolts
Fuck you. The Pennsylvania Whisky rebellion is BY FAR the most prominent tax revolt in American history, and it is 1000s of years too late to be considered the inventor of the phenom.
extreme sports
Rome.
energy efficiency
Watt.
health clubs
Rome.
Google searches
Altavista essentially the same, CMU.or Massachusetts, I forget.
Craigslist
Charging zero for an established service is not an innovation.
What does it mean then? One example: Energy Efficiency. I draw attention to this because:
Energy efficiency has ALWAYS been a concern of industry. And James Watt has done more for industrial efficiency than the entire state of CA will ever do. Sorry, but that's a fact. Even if you discount the low-hanging fruit of efficient steam-engines, then companies like Toyota are still at the forefront, not California. I am simply pointing out bullshit where I see bullshit.
And Freeways? Really, freeways?
EVERYBODY, and even the ignorant part of American society knows that the US freeways were years behind Germany. I'm just pointing out gross stupidity. Nothing else.
The Lincoln Highway was built to coincide with the Panama-Pacific International Exposition in San Francisco in 1915, and was the inspiration for the Interstate Highway System.
Modern, riveted, blue jeans were invented in California.
Altavista was invented at Digital Equipment Corporation's Western Research Laboratory, in Palo Alto, CA.
iPhones were invented in California. Credit for mobile phones is spread throughout much more than Finland, with Motorola and AT&T playing significant roles.
Marx is just a non-sequitur, as far as I can tell.
Which is all beside the point, as that sentence is literary device meant to evoke a sense of place.
Anywhere's probably better than Detroit. Having never visited California in my life (closest I've come was living in Texas), I really want to see how great it is. So please, Paul Graham, if you are reading this, please at least give me an interview so I can fly there for free.
Well Michigan vs Texas, which one is closer to california? Texas is hot like California, and it's economy is better than michigan's. I said it's the closest I've been, and I also didn't mean physically either.
