California
likes to boast that its booming economy is the sixth largest in the world – as
calculated by its own state government. In contrast, rust belt states like Michigan and Ohio are
seen as pathetic economic has-beens by the self-congratulating liberal elite.
Not so fast, says Carson
Bruno in Real Clear Markets. Adjust for cost of living, which is
36% higher than the national average, and California comes out behind Mexico:
[U]sing the cost of living adjusted data from the
International Monetary Fund and adjusting California's GDP data provides a
better snapshot of California's economic standing in the world. Doing so shows that California
is actually the 12th largest economy – a drop of 6 spots – and
actually puts the state below Mexico.
A full 50% of the California economic growth miracle comes from a
few dozen Silicon Valley firms – think Apple, Google, Facebook. It's a
banana republic of high tech.
[A]s economic blogger Richard Rider points out, the
aggregate GDP statistic is really not a good indicator of a state's economic
health, especially since one industry appears to be propping up the "6thlargest
economy" myth. California
has over 39 million people, more than any other state, so a far more accurate
assessment of its economy, Rider writes, would be per capita GDP
as compared to the rest of the country. After adjusting the GDP
figures to account for the cost of living (COL), the Golden State ends up with
a paltry 37th place ranking within the U.S.A., with a
$45,696 per capital GDP. Even rustbelt states, such as Michigan and Ohio, have
a higher adjusted per capita GDP. Despite Silicon Valley's high-tech giants,
California barely squeezes past impoverished New Mexico.
Because of the high taxes
and onerous government policies that keep housing down and costly illegal
immigration up, the middle class is fleeing the state. More tech workers
are leaving California than are moving there.
California has the highest
state income tax, the highest sales tax, the highest gas tax, property taxes
95% higher than elsewhere. Small businesses that make no profit – that
is, zero profit – are still taxed.
Lastly, while California
has the biggest unadjusted GDP among the states, it is also earns another
distinction: the highest poverty rate in the nation.
If California is such a prosperous state as liberals claim,
why does it have the highest poverty rate in the nation? According to the
Census Bureau, the poverty rate
is 23.4%, which is 17% higher than second place Nevada.
California has 33% of the entire nation's welfare cases – more
than the next seven states combined.
[T]he producers are leaving the state and the takers are
coming in. Many of the takers are illegal aliens, now estimated to number over
2.6 million. The Federation for American Immigration Reform estimates that
California spends $22 billion on government services for illegal aliens,
including welfare, education, Medicaid, and criminal justice system costs. ... [I]llegal aliens in California
contribute only $1.21 billion in tax revenue, which means they cost California
$20.6 billion, or at least $1,800 per household.
Illegal aliens improve the quality of life for the elite, who rely
on them for personal and household services of all kinds. For the rest of
society, not so much.
[I]n 2004, 95% of all outstanding warrants for murder in
Los Angeles were for illegal aliens; in 2000, 23% of all Los Angeles County
jail inmates were illegal aliens and that in 1995, 60% of Los Angeles's largest
street gang, the 18th Street gang, were illegal aliens. ... [T]he Brown
administration will not release any statewide data on illegal alien crimes.
That would be insensitive.
The California economy is big, and its taxes are astronomical, yet
the government is still hugely in debt. Some cities have pension liabilities that eat up
their entire budget, with nothing left for current expenses.
With the state now funding over 250 agencies that intrude
into every aspect of its citizens' lives, it is clear that government spending
is completely out of control. California political writer Steve Frank estimates
that the real state government debt is $2.8 trillion.
My husband and I are traveling to San Diego for a traditional jazz
festival. We've been warned to get Hepatitis A shots, as if we were
traveling to a third-world country.
Welcome to California.
Hat tip: The American Spectator. Read the whole
article by Steve Baldwin: "Adios, California. A fifth-generation
Californian laments his state's ongoing economic collapse."
