The California economy, as well know, is scuffling a bit right now.
As we scoured the news wires this week, we couldn’t help but see some more unsettling news about California and our economy.
DEFENSE SPENDING CUTS COULD HURT CALIFORNIA
We turn our attention to Washington D.C. where Congressional leaders are beginning to assess what happens if big federal budget cuts come later this year and next. A huge part of the federal budget is the Defense Department. Defense spending is still a big influencer in the California economy, and media are reporting that up to 150,000 jobs could be lost in California if big defense cuts come.
Will it come to that? Hard to say. But the gridlock in Washington D.C. over taxes and federal spending shows no sign of abating before the November election. Keep an eye on this, because it could hit the already vulnerable California economy pretty hard.
FORBES CRITICIZES THE BULLET TRAIN
The “Bullet Train” that California voters approved four years ago seems to have lost some of its sex appeal. In fairness, opinion polls indicate if Californians had another chance to vote on the project, which would build a high speed rail from L.A. to San Francisco, that voters would probably turn it down. Forbes Magazine just ripped California for the project, which was partially funded by the Legislature earlier this month. Forbes called California the country’s most dysfunctional state and likened us to Greece.
A case of East Coast bias? Or clear-eyed analysis? We’ll let you decide!
CALIFORNIA PENSION CRISIS? PERS UNDERPERFORMING
California’s public pensions are increasingly becoming a point of political contention. Are they too generous? Can we afford them?
You won’t get an answer to those questions here, although we believe a good spirited debate on the issue would be good for the state.
But there are storm clouds on the horizon reported this week by Cal PERS, the largest public pension FUND in the country earned what can only be called a paltry 1% in its investments this past year, below the 7.5% it had planned to make. Fewer dollars, more pension obligations on the way combine for something to be very worried about.
We hope your IRA or 401k had a better year.