California Now World's 5th Largest Economy, Surpassing UK | Hacker News Reader

California Now World's 5th Largest Economy, Surpassing UK

nytimes.com

85 pointsSynroc38 comments

The question is what is CA going to do when its municipalities indirectly cap GDP via their terrible housing policies. The entire state is under a slow boil by NIMBYism that will eventually choke its otherwise impressive economy.

typos: it's -> its

I'm not a NIMBY myself, but most of them would claim that preserving quality of life for existing residents is more important than maximizing GDP or making space for newcomers. If you want to improve housing policies then you'll have to find a way to counteract those objections.

How about existing residents who rent in CA cities? Your argument doesn't stand.

Very few of the hard-core NIMBYs are renters. My argument still stands.

Homeowners and renters are affected by these policies differently, often in opposite ways. That's the point. Obviously these NIMBYs are homeowners because their position grossly favors existing homeowners. Mortgage payments are not affected by a constant influx of new people but rent prices are. Stalling is a win for one side only. Anybody can wish for "preserving quality of life." But while they are wishing homeowners are reaping all of the benefits and renters are getting screwed.

I would be very surprised if there were more homeowners than renters in cities, and if there were---then what we have is democracy at work.

Consequently, I believe that many renters simply aren't participating in the political process or are strangely voting against their obvious interests.

The YIMBY platform will work because the majority of people will benefit from it, but need organization to actually get to the polling booths and participate in lobbying.

Counterpoint: as a gay Californian (and a SF homeowner to boot), I strongly identify as a YIMBY.

Aside from selfishly wanting room for more local colleagues at my startup, it's my mission in life to preserve California as a refuge for persecuted LGBT people across the country. The best way to do that is to build more housing and stabilize rents, not to block sorely-needed high-density housing because there used be a historic gay bar there 50 years ago that few will remember.

This is truly incredible and speaks to the amazing spirit of people and government of California. These numbers become even more incredible when you consider that UK has 66 million people. And CA is also a net donor state when it comes to Federal taxes. If you add that spending back, the economy would be even bigger. Most articles here and in the internet speak to a dislike of California. But for me, everyday I feel lucky to live here.

How's wealth and welfare distribution around the state though?

This was the same question I had. According to the recent Federal Data, California had a GDP $2.747 trillion[0]. In 2016, Los Angeles' GDP was a little over 1 trillion by itself[1].

A quick search revealed this too[2] (because I was curious about the impact "Hollywood" has on the economy):

> According to a recent report by the Los Angeles County Economic Development Corporation, motion picture and sound recording jobs accounted for just 2.4 percent of the private sector labor force in the city of L.A. in 2015.

(Note: I couldn't quickly find total Hollywood revenue, plus there's the "creative accounting" issue[3] too)

It's certainly a rabbit hole of data analysis.

[0] http://www.businessinsider.com/california-economy-ranks-5th-...

[1] https://www.statista.com/statistics/183822/gdp-of-the-los-an...

[2] http://www.laweekly.com/news/how-much-does-hollywood-contrib...

[3] https://duckduckgo.com/?q=hollywood+creative+accounting&ia=w...

It has more poverty than every other less developed state if you subtract living costs: http://www.politifact.com/california/statements/2017/jan/20/...

No reason to use a paywalled version of this AP story

https://www.apnews.com/dfe5adff6d3640249e63f5637dfeb995

You mean once again. It has been #5 before.

5th largest in the world and yet where is all of the money going? California is in a huge deficit.

The US government doesn’t care about deficits, so it would seem.

This is not the US government's debt. It is debt belonging to the State of California. And California certainly does care about deficits. States do not have the same leeway handling their indebtedness that the federal government does.

To landlords, mostly. If you look at the numbers, the deficit has mostly shrunk after some truly huge ones.

California budget deficit: $1.6 billion

California GDP: $2.7 trillion

I think California will be fine.

"Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

(Though, in the end, I agree with you.)

There's really no sensible comparison between an individual on a fixed income versus a sovereign with taxing authority.

Where do you come up with a $1.6 billion deficit? There is currently a $6.1 billion surplus, which actually understates the strength of the budget, given debt deleveraging.

http://www.latimes.com/politics/la-pol-sac-jerry-brown-budge...

Interesting - this article seems to say the opposite:

https://www.wsj.com/articles/jerry-browns-legacy-a-6-1-billi...

California has a high amount of debt, particularly per household, when compared to (some) other U.S. states. However, the last few years under governor Brown have led to a budget surplus for those years, which is commonly attributed to the tax hikes of Proposition 30, among better spending decisions.

We're looking at a pretty substantial surplus for this year's budget, which will be finalized in June, and lawmakers have different ideas about what to do with it. Governor Brown wants to put it in the rainy day fund, conservatives largely want to enact tax relief for some Californians, and the state's liberal politicians largely want to spend it on other things.

Personally, I'd like if California used at least the bulk of it to pay down some of our unfunded liabilities with regards to pension programs, of which we still have about $275 billion (of over $400 billion in total debt). There are plans to take care of these over the next 3 decades, but settling it a bit earlier never hurt.

Exactly. Fund the existing pension liabilities now while money is relatively cheap. Then transition all state employees to defined contribution retirement plans going forward so that it will be closer become impossible to ever have underfunded pension plans in the future.

  the last few years under governor Brown have led to a budget surplus for those years

no, it wasn't a surplus. 2017 showed a $1.6 Billion deficit[0].

[0] http://www.latimes.com/politics/la-pol-sac-jerry-brown-budge...

You're right -- due to some (must-have-been-pretty-awful) miscalculations about the cost of a certain program that pushed it into deficit territory. My mistake! I was also considering 2017 as this year since a budget spans two years.

For completeness, CA roughly carried a deficit from '02-'03 to '12-'13, and then roughly a surplus from '13-'14 onwards, except for 2017.

Your data is a bit out of date. California has a surplus now.

There is an underfunded pension but the payments aren't due for many years in the future.

  California has a surplus now.

What budget year are you talking about, where an actual surplus was evident when the budget year closed?

Projections are just projections and can be seriously wrong. A projected $2.8 billion surplus[0] quickly changed to being a $1.6 billion deficit[1].

[0] https://www.scpr.org/news/2016/11/17/66216/california-analys...

[1] http://www.latimes.com/politics/la-pol-sac-jerry-brown-budge...

Your links are from Jan 2017. Those were projections. 2017-2018 was $6bn budget surplus on top a $8bn rainy day fund. Here's the WSJ link from Jan 2018

https://www.wsj.com/articles/jerry-browns-legacy-a-6-1-billi...

UK has a huge deficit too. Most highly developed countries do.

Countries have the power to print money. California does not.

Euro countries don't either.

UK is not in the eurozone

I know, but GP also mentioned "most highly developed countries", and parent replied in the plural.

California currently has a rainy day fund of $8 billion and a current budget surplus of $6.1 billion.

https://www.wsj.com/articles/jerry-browns-legacy-a-6-1-billi...

Not even close to as bad as the world's largest economy and their deficit.

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