The euro zone isn't the only economy reeling from "failed states." The United States has several of its own — most notably California and Illinois.California is not only shedding jobs, it's shedding companies:
According to the CIA's world factbook, California's economy is the ninth largest in the world with a gross state product of $1.9 trillion. Illinois' economy is the world's 23rd largest economy with a gross state product of nearly $630 billion.
These are impressive figures, to be sure, but both states have seen their global position slip in recent years — and further erosion is likely thanks to poor fiscal stewardship and anti-competitive tax increases.
Both California and Illinois are hoping that tax hikes will bridge gaping deficits created by politicians' failure to rein in government growth — including expanded entitlements and exorbitant public sector pensions.
Does any of this sound familiar? It should. This is precisely the sort of unchecked public sector growth that has landed Greece in its current predicament — a worsening crisis that has pushed the entire euro zone to the brink of collapse.
The backbone of a new social website with free online classifieds is looking to not only leave Palm Springs, but leave California altogether.
SquawkBoard.com offers "neighborhood bulletin boards" for neighborhoods throughout the United States, so where the company moves to is really wide open, said spokeswoman Faith Jackson.
"California's tax hike will place a strain on SquawkBoard's growing company and is seeking to save various taxes by moving out of the state," she said.
Gov. Jerry Brown is seeking to raise taxes and establish across-the-board cuts as a way to shore up the state's $16 billion budget gap. Sales and income taxes are first on his list, with hopes of raising enough money to prevent more cuts to education.
Will our friends on the left figure this out before the last company to leave turns out the lights?
4 comments:
No. They'll develop clever rationalizations for why California's debt ought to be federalized and then fiercely believe them while they demand everyone else believe them.
Being an optimist I believe things will never get that far and California's voters will, despite the careful gerrymandering of the state that assures Democratic Party dominance for the foreseeable future, throw off the yoke of the left.
My prediction is that as the left edge of the Democratic Party continues to try to steer California off a precipice more conservative elements within the party will stage a revolt which will be met by a Pyrrhic response. The effort to hang onto power will tear the party apart and a shattered Democratic Party will lose effective, if not actual, control of the state.
I wish I could believe what you say, but too many people are too heavily invested in this and would rather go off the cliff than admit they were wrong. In fact, after we've gone off the cliff their refrain will be, "If only those Republicans hadn't blocked all those tax increases we wouldn't have gone bankrupt."
I thought this was good: Chris Christie vs. Jerry Brown, instructive comparison.
I'm not saying it's a slam-dunk; it's not entirely beyond the realm of possibility that the lefties will hang on until they drive California to economic ruin which is, I believe, terra incognita - no one's ever been there before which may carry a lesson in and of itself.
Of course one shouldn't simply dismiss the possibility of bankruptcy - http://tinyurl.com/4hr2fgv - but looking at the way things have been going the last year or so I'd say the left's losing just about everywhere and some of the left's actions, especially in California, can be viewed as last-ditch efforts to ram through legislation before reality catches up with them.
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