Sunday, June 23, 2019

California 75% probability of financial crisis in next recession

June 23, 2019 By Chriss Street

The Public Policy Institute of California (PPIC) estimates there is a 75 percent probability that the state’s next recession will result in a severe financial crisis.

PPIC was established 25 years ago by William Hewlett, co-founder of Hewlett-Packard, to provide nonpartisan research regarding the state’s population, economy, governance and public finance issue. Responding to Gov. Gavin Newsome’s May Revised $147 billion “California for All” General Fund Budget, PPIC’s independent analysis warns:
We estimate that a relatively mild recession would produce a drop in total General Fund revenue between $28 billion and $36 billion spread over three years. Should the state experience a moderate recession, revenue declines would range between $69 billion and $100 billion over four years. And finally, in a severe recession declines would be even deeper, between $173 billion and $185 billion over five years”
California has a very volatile revenue stream as evidenced by the severe last recession that began in 2008 and persisted for five years saw state revenues fall by an average of 26 percent, or about $37 billion annually. Revenues in the mild three year “Dot-Com Bust” suffered a 6 percent annual decline. The two prior recessions are considered moderate, with the 5-year early 1990s “Slump” experiencing a 14 percent annual revenue declines and the early 1980s “Oil Shock” seeing 12 percent annual declines..........To Read More....

My Take - We're entering into unknown territory for the United States, and we can thank the left for this.  This is what they want, bankrupt America to take it over, it's part of the left wing goal to bankrupt America.   Cloward–Piven strategy was part of that strategy, which was "outlined in 1966 by American sociologists and political activists Richard Cloward and Frances Fox Piven that called for overloading the U.S. public welfare system in order to precipitate a crisis that would lead to a replacement of the welfare system with a socialist system of  "a guranteed annual income" and thus an end to poverty".

I think this rebuke to California is far milder than is reasonable, or as reality dictates.  California is broke, and getting more broke daily.  Any economic downturn will destroy their state financially, and at some point it's my belief the state government will have to turn all power over to the federal government in order to survive.  Possibly making California a territory, with the President of the United States appointing a Territorial governor who will control all aspects of government, including the courts.   I don't know if such an arrangement is legal or ever possible, but no matter what, California as we know it is doomed, with Illinois and New York are right behind them. 

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