The point about the State of California heading towards bankruptcy is not affected by either its tax rate compared to other states or the amount of venture capital dollars it sucks up. The primary driver for the state going bankrupt is its expected income vs. its expected expenses. Venture funding in California has little affect on its tax base as most profitable startups are incorporated in Delaware or have their revenue generators incorporated offshore.
Yes, they'll be good revenues from the employees but no windfall should be expected. (i.e. the state should not expect abnormal returns because of in state venture capital investment)
My point is that when you take look at expected income vs. expected expenditures you can expect to see the state go further and further into debt. It's anyone guess as to whether that will lead to filing for bankruptcy or not, but the direction the state's fiscal health is heading is clear.
Regarding the state's fiscal picture this article largely addresses a straw man. No one is arguing that the state will go bankrupt because it's tax rate is wildly out of whack, or because it is not getting enough venture capital funding.
People are arguing that the state will go bankrupt because the state already has a fair amount of debt relative to GDP, it runs large current accounts deficits relative to GDP, and has large unfunded pension mandates. This article addresses none of these points.
Yes, they'll be good revenues from the employees but no windfall should be expected. (i.e. the state should not expect abnormal returns because of in state venture capital investment)
My point is that when you take look at expected income vs. expected expenditures you can expect to see the state go further and further into debt. It's anyone guess as to whether that will lead to filing for bankruptcy or not, but the direction the state's fiscal health is heading is clear.
Regarding the state's fiscal picture this article largely addresses a straw man. No one is arguing that the state will go bankrupt because it's tax rate is wildly out of whack, or because it is not getting enough venture capital funding.
People are arguing that the state will go bankrupt because the state already has a fair amount of debt relative to GDP, it runs large current accounts deficits relative to GDP, and has large unfunded pension mandates. This article addresses none of these points.