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California’s “Existential” Financial Crisis is Much Worse Than What Is Being Reported

Chriss Street, a renowned financial expert, has long argued that California is facing an existential financial crisis.

He notes that the state is losing billions of dollars each month and prospects for the future are even more dire.

With more than a decade of experience writing articles on California’s fiscal struggles, he was one of only a few people chosen to develop strategies for restoring prosperity after the Great Recession of 2009.

Given his extensive knowledge regarding the state’s finances, Street has been advocating for some time that California is in serious financial difficulty and this has led him to support the idea of splitting and forming New California.

In a report supplied overnight, Street says the following about the financial situation of the state of California.

The non-partisan California Legislative Analyst Office just acknowledged the State of California business model has collapsed. After projecting $14 billion in deficits for the next two years in May, the LAO now projects the State of California faces $100 billion deficit over the next 18 months and $187 billion over the next four and a half years.

The financial press is calling the grim alert a shocking surprise, but the New California State movement that seeks to split the state in half has been issuing similar estimates for several years. The warning signs of an existential crisis has been brewing include California unable to issue a timely audited financial statement since 2018, over 1 million residents leaving the state, and collecting lower taxes after raising tax rates.

California since 2021 has burned down $97 billion of reserves to about $26 billion at the end of November, and is running $4 billion of negative cash flow per month. The liberal California Legislature also recently passed a law that limits its local school districts to holding a maximum 3% budget reserve, about 10 days of funding.

The real culprit for the accelerating crisis is the end of the globalist boom that began in California 45-years ago with the Proposition 13 Tax Revolt that catapulted former Governor Ronald Reagan to the White House. President Reagan slashed the 87% capital gains tax rate to 27%, kicking off the greatest venture capital boom in history.

Below is Street’s memo.

California Existential Cris… by Joe Ho

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Joe Messina

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