What do you think about the California Secession idea?

[mrstickball]

Wonktonodi said:

mrstickball said:

Oh, they are. Texas is booming while CA is becoming a death trap. The question is if anyone in CA survives the collapse. Thus the argument for scession.

I'm curious why you say CA is a death trap? Also why you think there could actually be any sort of collapse?

Lets see:

1. California has the 3rd worst unemployment rate in America (2nd if you take out Puerto Rico). It is also recovering the slowest of any state.
2. As you mentioned, the laws require a 2/3rds majority vote to raise taxes. Since they do not have that, they can't raise taxes very often, and resort to things like the Amazon tax which aren't going to solve the problem. Even then, their taxes are so high as they are, revenue isn't the problem - spending is.
3. Businesses are relocating far and away from California. California has some of the worst regulatory and tax structures in America, therefore it is easier to do business elsewhere in far more pro-business states. Although CA has had these problems for awhile, they always maintained some advantages such as the tech sector being a boon, but many of these said companies are relocating to nearby states such as Oregon, Nevada, or Texas. Heck, a few companies have relocated to Ohio of all places...And if a business is relocating from somewhere to Ohio, you know its real bad.

You combine these factors ontop of their massive budgetary issues, and the long-term prospect for fixing CA is not very good. If you don't have job growth, then you aren't going to increase revenues - therefore you must raise taxes. So if neither of these things can happen, you must cut spending, which is something that CA is not doing to a level that will fix the problem.

 

Here are a few reading suggestions:

Businesses leaving CA: http://foxandhoundsdaily.com/blog/joseph-vranich/7861-california-business-exodus-now-triple-last-years-rate

CA Budget battle: http://money.cnn.com/2011/01/10/news/economy/California_budget_brown/index.htm

From my viewpoint, CA much like a few other places are in a pretty bad position. Unlike some places, I don't think CA has the willpower to do what is needed to fix their issues, and as far as my understanding is, their budget that was just passed indeed passes the buck yet again and uses budgetary tricks to balance the budget, rather than reduce spending to a level that is needed. California was the 2nd worst state in terms of budget shortfall vs. revenues of any state in the US in 2011 (New Jersey was #1), and I don't quite think Jerry Brown is Chris Christie, so again...Another strike for CA.

CA may fix itself, but I don't see the climate being created for it right now - not when other states seem to be moving at a much more rapid pace to fix things.