Social Question

josie's avatar

Will California's bad news eventually be US's bad news?

Asked by josie (30931points) July 7th, 2011

http://thebusinessrelocationcoach.blogspot.com/2011/06/calif-business-departures-increasing.html
This article describes the rising rate of disinvestment in California. Taxes are too high, regulations occasionally bordering on preposterous. Businesses are going away.
Which means decreased tax revenue, which is bad news for a state that has created a serious crisis of debt for itself. See this http://www.usdebtclock.org/state-debt-clocks/state-of-california-debt-clock.html
My own state has lost lots of businesses as well. Some have simply moved to other states that do not tax and regulate as aggressively.
But the Federal government, in the form of the president and the NLRB has given a hint of what it thinks about that in their dealings with Boeing.
So eventually, they won’t just switch states. They will just go away.
Is California once again a bell-weather?

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6 Answers

Judi's avatar

People and business will always come to California because they want to live here. Diverse landscape, and the weather can’t be beat.

tedd's avatar

That’s what a two term Republican (EDIT) leader who used to be an actor will do to ya, send you on a spiral to death :D

In all seriousness though, to think that the ups or downs of state or national economics are linear and not cyclical, is ignorant of how the economy works. I would guess within the next ten years California will rebound, and possibly bottom out again, and maybe rebound again! That’s the way our capitalist system works, you never stay on top, or on the bottom, too long.

josie's avatar

@tedd You may be right. Never much liked the word ignorant though.

tedd's avatar

@josie meh, it has a negative connotation because people use it as a flat out insult, when in reality it just means uninformed about something. I’m ignorant to the moods of women, for example :)

wundayatta's avatar

The market in California is too big. There’s too much money to be made. I don’t believe the businesses are leaving because of taxes. They might say it, or maybe they don’t. It’s other people who say it. But taxes are only factor in these decisions. And who knows how many of the businesses are leaving because they can’t compete?

ETpro's avatar

It will if we follow the Grover Norquist route to success, namely cutting taxes perpetual. It’s certainly possible to be overtaxes, but it’s equally possible to be undertaxed and thus starve infrastructure, education and investment in things that build a bright future. It’s kind of like trying to become an incredibly powerful strong man you cutting of, one by one, each body part that isn’t already strong.

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