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California Secession Diary #10 What about all the debt we have ?

by THE Twank Sun Nov 20th, 2016 at 12:46:02 PM EST

Below the fold are two pages from the Calexit Manifesto and the title of one editorial in today's Sacramento Bee; the body of the editorial is behind a pay wall. And an added treat!

California has amassed over $400 billion in state debt - a figure that
is growing everyday and represents about 17 percent of California's
Gross Domestic Product (GDP) and slightly more than $11,000 for every
Californian. As bad as these figures seem, they are much better than those
for the United States as a whole where the national debt is over $19.5
trillion (and growing), or 105% of GDP, and nearly $60,000 per citizen.

During the transition from statehood to nationhood, California will agree to
assume its share of the U.S. national debt on a per capita basis. This will
reduce the national debt by nearly $2.4 trillion for the United States but
California's exit also means the overall GDP of the United States will fall by
$2.46 trillion. Thus, although its national debt will fall to $17 trillion, the
debt-to-GDP ratio of the United States will rise to 110% of GDP.
At the same time, California's exit will raise our debt to $2.79 trillion.

However, since California has paid approximately $120 billion more in
federal taxes than we have received in federal funding since 1981, we will
obtain a credit from the United States in that amount, reducing our total
debt from $2.79 trillion to approximately $2.67 trillion. Compared to our
sixth-largest-in-the-world economy, that means California's national debt will
be about 108% of GDP, similar to the debt-to-GDP ratio in Belgium and two
points lower than in the United States under this scenario.

Honestly, these are not great numbers for California to deal with as a newly
independent country. However, the point to stress here is that California's
current debt is just 17 percent of GDP and growing at a slower pace than
the national debt of the United States. Therefore, this leads us to conclude
that independence is a necessity because the longer we remain part of
the United States, the larger our share of its national debt is. So it's a race
against a debt clock in a situation that worsens with every passing second.

Q: "Why is a per-capita share of debt a fair amount?

A: Assuming the national debt on a per capita basis means California will
assume a share of the national debt proportional to its share of the US
population so each Californian's share of the national debt is accounted for.

This is actually quite generous. California has not only recently been a source
of taxes to subsidize other states, but also a source of natural resources from
which the United States owes its very existence. General Grant, who became
President four years after the American Civil War, said of California's support
for the Union during that conflict: "I do not know what we would do in this
great national emergency if it were not for the gold sent from California."

So, California has a long history of sending its riches - be it gold or dollars - to
keep the Union alive and well and we believe we've already paid our debt.

Q: "What do you mean by "it's a race against the clock"?

A: The debt-to-GDP ratio is getting worse every year. What will our share of the
national debt be in 2030 when it is projected to reach $30 trillion?

As stated, the current figures are bad enough. If we accept that the US
national debt will continue to grow, then we must also accept that our share of
that debt will also grow as long as we are a part of that country.

It is not just the $19.4 trillion national debt, either. Federal debt held by the
public is projected to nearly double over the next 30 years to 141% of GDP by
2046. Eventually, this will make the Union fiscally unsustainable. Assuming
the Union will inevitably collapse under the weight of its debt, the longer we
wait to exit the Union, the larger our share of its debt will be. So, would you
rather take $2.4 trillion now, or $3.6 trillion in 2030?

Twank Note 1: This doesn't include the coming Trump financial debacle which will balloon the U.S. debt by destroying their economy and wasting more trillions on the military. Let's get the hell out of here while the gettin' is good (as we said as kids).

Could California succeed if it became a nation?  
(Editorial by Dan Walters, famed asshole)


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