{"id":12889,"date":"2010-11-29T22:59:30","date_gmt":"2010-11-29T22:59:30","guid":{"rendered":""},"modified":"2010-11-29T22:59:30","modified_gmt":"2010-11-29T22:59:30","slug":"how-california-bails-out-america","status":"publish","type":"post","link":"https:\/\/calitics.com\/index.php\/2010\/11\/29\/how-california-bails-out-america\/","title":{"rendered":"How California Bails Out America"},"content":{"rendered":"

Over at MarketWatch, Brett Arends slams<\/a> the argument that California is about to default because of its free-spending ways. After he exposes the lack of facts or numbers to Chris Whalen’s “omg CA default” nonsense<\/a>, Arends points out that California is actually bailing out the rest of the country:<\/p>\n

California bails us out. It has been bailing out the rest of America since, oh, about 1849 – before it even joined the union.<\/p>\n

Californians are so productive that every year they send billions of dollars in surplus dollars to the rest of America. Year after year they have sent vastly more in federal taxes than they ever get back in federal spending.<\/p>\n

California isn’t our Greece, it’s our Germany. It isn’t Little Orphan Annie. It’s Daddy Warbucks.<\/p><\/blockquote>\n

Indeed. California gets 78 cents back on every dollar it sends to DC, meaning that nearly one quarter of our federal taxes are siphoned off by the red states (most of whom receive more in federal expenditures than they send in tax receipts).<\/p>\n

Arends also shows that over the last 11 years, it’s been California that has produced more economic growth – and that its middling tax rate, its decent wages, and its public services help achieve this goal, rather than retard it:<\/p>\n

California’s a basket case? The state has one of the highest living standards in the country, yet over the past 10 years the economy has still grown much faster, per person, than the national average. According to the U.S. Bureau of Economic Analysis, it’s up 15% – compared to 8.9% for the U.S. overall.<\/p>\n

It’s grown faster than low tax neighbors like Arizona, Utah or New Mexico. It’s grown three times faster than Texas.<\/p>\n

And this was from 1999 through 2009: In other words from the peak of the dot-com years through the depths of the recession. It managed this growth despite the double blows of the tech and housing busts.<\/p><\/blockquote>\n

Now, one ought to be too careful to not go overboard here. California’s recent economic growth has not been evenly distributed, and poverty has soared<\/a> since Sacramento began embracing austerity in 2007 – and, surprise surprise, we haven’t seen a decline in unemployment or a spurt of new growth even after 3 and a half years of austerity budgeting.<\/p>\n

But Arends’ article is a useful and welcome corrective to the “California sucks” narrative being peddled by “financial analysts” who are actually just spewing right-wing talking points without any regard for the facts.<\/p>\n

Perhaps the most interesting thing, however, is how I came to know of this article: Jerry Brown tweeted it.<\/a> If this means he is going to reject the right-wing arguments about our state’s economy and budget, then we have a fighting chance at not just surviving this downturn, but implementing some truly progressive policy.<\/p>\n","protected":false},"excerpt":{"rendered":"

Over at MarketWatch, Brett Arends slams<\/a> the argument that California is about to default because of its free-spending ways. After he exposes the lack of facts or numbers to Chris Whalen’s “omg CA default” nonsense<\/a>, Arends points out that California is actually bailing out the rest of the country:<\/p>\n

California bails us out. It has been bailing out the rest of America since, oh, about 1849 – before it even joined the union.<\/p>\n

Californians are so productive that every year they send billions of dollars in surplus dollars to the rest of America. Year after year they have sent vastly more in federal taxes than they ever get back in federal spending.<\/p>\n

California isn’t our Greece, it’s our Germany. It isn’t Little Orphan Annie. It’s Daddy Warbucks.<\/p><\/blockquote>\n

Indeed. California gets 78 cents back on every dollar it sends to DC, meaning that nearly one quarter of our federal taxes are siphoned off by the red states (most of whom receive more in federal expenditures than they send in tax receipts).<\/p>\n

Arends also shows that over the last 11 years, it’s been California that has produced more economic growth – and that its middling tax rate, its decent wages, and its public services help achieve this goal, rather than retard it:<\/p>\n

California’s a basket case? The state has one of the highest living standards in the country, yet over the past 10 years the economy has still grown much faster, per person, than the national average. According to the U.S. Bureau of Economic Analysis, it’s up 15% – compared to 8.9% for the U.S. overall.<\/p>\n

It’s grown faster than low tax neighbors like Arizona, Utah or New Mexico. It’s grown three times faster than Texas.<\/p>\n

And this was from 1999 through 2009: In other words from the peak of the dot-com years through the depths of the recession. It managed this growth despite the double blows of the tech and housing busts.<\/p><\/blockquote>\n

Now, one ought to be too careful to not go overboard here. California’s recent economic growth has not been evenly distributed, and poverty has soared<\/a> since Sacramento began embracing austerity in 2007 – and, surprise surprise, we haven’t seen a decline in unemployment or a spurt of new growth even after 3 and a half years of austerity budgeting.<\/p>\n

But Arends’ article is a useful and welcome corrective to the “California sucks” narrative being peddled by “financial analysts” who are actually just spewing right-wing talking points without any regard for the facts.<\/p>\n

Perhaps the most interesting thing, however, is how I came to know of this article: Jerry Brown tweeted it.<\/a> If this means he is going to reject the right-wing arguments about our state’s economy and budget, then we have a fighting chance at not just surviving this downturn, but implementing some truly progressive policy.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[],"tags":[],"class_list":["post-12889","post","type-post","status-publish","format-standard","hentry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack-related-posts":[],"jetpack_shortlink":"https:\/\/wp.me\/p6Pvhz-3lT","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/posts\/12889","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/comments?post=12889"}],"version-history":[{"count":0,"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/posts\/12889\/revisions"}],"wp:attachment":[{"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/media?parent=12889"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/categories?post=12889"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/tags?post=12889"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}