I don’t think CA or NY will fall.
CA has a vibrant tourism industry, Silicon Valley with Yahoo, Apple, HP, Google, Paypal, Ebay, Facebook, Stubhub, Dolby labs, Varian labs and biotech with Genetech (now a division of Roche but the company is still there), a vibrant movie industry, import export ports of Long Beach and Oakland, lots of vegetable farming in the central valley, and aerospace manufacturing.
Ny will ride the coattails of the very profitable financial industry.
CA is one of the few places that can actually afford the welfare state. Oh and CA also has conventional oil and a ton of undeveloped shale oil.
CA is replacing US citizens with illegals and its film industry is mostly in Vancouver now. It cannot sustain its present budget
Do the math.
Yes they have income.
But.
Calculate the sum total of retired government workers and workers who will be retiring in the next decade, and extend that out through these people’s expected lifespan. Throw in Federal, State, County, and city. All of them. Everyone drawing a government retirement.
Compare the two.
This is why government was projected (from a 1970s vantage point) to collapse down the road. Well, now we are pretty much there and natural lifespans are longer than at the time this was calculated.
There is no simple solution. We have more employees than we can afford. A lot of jobs that used to be staffed for a few years with people who felt they were doing a service have become lifelong careers. The cost for the change wasn’t paid up front. We now have byzantine regulatory agencies that employ an army of paper shufflers..
You look at how many people work for the government per producing taxpayer now, and compare that to forty years ago.
Pollyanna denial isn’t going to make this go away.
Just as the same sort of Pollyanna denial didn’t stop the entirely predictable real estate bubble burst.
lots of vegetable farming in the central valley, and aerospace manufacturing.
With the sequester effecting FY funding, the aerospace manufacturing sector is in a severe downturn. Contracts are not being awarded readily. With the EPA withholding irrigation waters...the CA central farming sector has been in a severe recession for 2.5 years. Unemployment and welfare recipients are UP in the central valley.
Before I left Sacramento, Aerojet Rocketdyne was one of my customers. Their Rancho Cordova facility is a shadow of what it once was. The ruins of the old McDonnell Douglas plant nearby stood out in an overgrown field.
Aerospace manufacturing in CA is dying off.
I live in California.
It is not 1992 anymore.