The Economics Of A California Secession

Imagine a newly-reconstituted United States, 49 in number, with an international border between California and Nevada, Arizona and Oregon.  Woo hoo, you say!  No more Left Coast libtards dominating American rhetoric, media and politics!  Ideologically, the removal of California from the body politic of the rest of the USA is a beautiful thing.  But there are two realities which argue strongly against secession.

First is the fact that California is a net contributor to the federal treasury.  Several years ago, California and the federal government transferred funds almost at par, as the following data show:

California Receives About $330 Billion From the Federal Government (f.y. 2009-10)

  • In FFY 2009–10, federal spending in California was roughly three times the amount of state spending (General Fund and special funds).
  • The federal government provides funding to individuals, state and local governments, nonprofits, and businesses in the form of payments (such as Social Security and Medicare), employee and retiree compensation, grants, and procurement (spending on goods and services).
  • About one–quarter of these federal funds flowed through California’s state budget.

California’s citizens and businesses paid $282B direct to the IRS during the same time period, according to this website on federal tax revenues:

Rank State Gross collections[11] Revenue per capita (est.) Ratio to GSP
1 California $281,227,298,000 $7,462.79 14.4%
2 New York $202,149,306,000 $10,365.77 17.5%
3 Texas $198,295,817,000 $7,736.33 15.2%
4 Illinois $119,116,442,000 $9,262.73 17.8%
5 Florida $116,758,697,000 $6,118.70 15.5%
6 New Jersey $112,103,329,000 $12,688.87 23.0%
7 Ohio $112,069,407,000 $9,710.54 23.2%
8 Pennsylvania $103,134,437,000 $8,092.82 17.8%
9 Massachusetts $77,218,196,000 $11,687.33 19.7%
10 Minnesota $72,676,800,000 $13,591.31 25.8%

However …. using available data from these sources and from ballotpedia, and averaging it so as to get a same-year comparison, we learn that California is on track to pay about $100B more annually to the federal treasuries than they receive in federal benefits and services.

Factor out the amount of fed money that goes directly to MediCal (the state’s socialized medicine plan) and related services, and the spread is closer to $175B.  These figures include federal payments made directly to individuals in California (social security, Medicare and the like) as well as federal grants to, and purchases from, California businesses.  Nonetheless, the net favors California as a contributor to the overall financial welfare of the USA.

Additionally, the data for 2015 (the most recent available online) show that California’s contributions to the federal coffers exceed that of any other state, with California paying in $406B, followed by Texas at $280B and New York at $270B.

Second, there is the matter of foreign trade.  Container ports in Long Beach, Oakland, and Los Angeles account for fully one third of all containerized freight imported to the US.  Bulk traffic in commodities such as crude oil and refined petroleum products, grain, and chemical products is not as concentrated on the west coast, but those giant boxes destined for your local Wal-Mart — those boxes full of laptops, flat screens, toys, HBA items, and packaged foodstuffs — largely flow through California.  Data supporting these statements is available from various DOT and US Maritime Commission websites, as well as the World Bank and the websites of global freight companies.

So California secedes …. what happens to this picture?  The federal treasury will not feel much impact, as $100B is (in DC terms) not that much money to replace.  But how will California’s internal revenues change?  How many businesses will leave the Nation of California?  Can California fund the steady growth in their government union pension liabilities, the support costs for the “illegals” they welcome into their “sanctuary nation”, and rebuilding after inevitable future natural disasters?

Well sure they can …. with import duties!  Picture a 15% tariff slapped on everything that lands on the west coast and is then “exported” via rail or highway to the rest of the USA from the Nation of California.  Imagine an openly socialist Emperor of the Nation of California deciding he does not wish to trade with the US after Donald Trump is re-elected in 2020 …. and closes the border.

Think twice before helping the Left Coast Libtards secede.  The negative financial consequences may well exceed the ideological benefits.  And short of signal-jamming, the corrosive rot flowing out of California’s so-called “entertainment” industry would still be seen and heard in the remaining 49 states.

— SafeSpace —

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5 Responses to The Economics Of A California Secession

  1. Popular Front says:

    A few precise hits will stop this secessionist bullshit once and for all starting with the Governor. I still view Brown as the Dead Kennedys did………California Uber Alles!

  2. GunnyG says:

    I disagree with your excellent post. Getting rid of these liberal scumbags and half-steppers, like that asshole judge in Hawaii who keeps blocking the travel ban would only make us a better and more prosperous nation. Wall them off and let them go bankrupt and we grow and prosper!

    • SafeSpace says:

      The import/export issue is, to me, yuuge. Remember that not only the seaports in CA are involved; major railway hubs and interstates connect major CA cities to the rest of the USA. You cannot replace infrastructure like that overnight or at low cost. California secession is highly unlikely IMHO but if it were to happen, we might have to make arrangements with Mexico or Canada to move freight via their port facilities.

  3. Hardnox says:

    Flock California!!!!!!!!!!!!! We don’t need stupid shits and illegals in our country. Our quota is past full.

  4. Uriel says:

    Sooo we eliminate those who have been forcing the conservatives in CA out of their right to protest. JB on Alcatraz along with his cohorts sounds good (no upgrades needed to the place except stronger security and NO ACCESS to any communications