Becoming Mexico

March/17/2011 16:24PM
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California is becoming Mexico. The new census data shows Hispanic children under 18 make up a majority of that age group. hispanics grew to 37.6% of the total population in California. Whites are now 40.1%. Those lines will cross in the next two years.

For the most part, whites are leaving the state for job opportunities and lower taxes. Corporations are leaving and taking employees and jobs with them. The biggest taxpayers are leaving and the zero tax payers are growing. The demand for government services is increasing as the capacity to pay for them is shrinking. The talent pool for professional jobs is diminishing forcing more employers to think about moving elsewhere to find a job pool. The pool of less educated workers is growing as the demand for those jobs is also shrinking.

The new governor wants to increase taxes to find revenue for the budget deficit. The normal result of this is to drive out more taxpayers, both corporate and personal.

If you bought a house in California that cost a million four years ago and is now worth $600,000 where is the value of that house headed in 5 years? With fewer and fewer people available to buy that house, the price has to keep going down.

The future of California is pretty bleak. Growth of non-skilled workers who need and get more and more from government to subsidize their existence puts more and more pressure on government budgets. The evacuation of higher wage professionals who take their tax dollars elsewhere reduces government revenue. If the solution is to raise taxes, more move. At some point, there is no solution.

The big buzz word, tipping point, seems very near in California. The growth segment of the population will continue to vote for the politicians who offer more help from the government. At some point in the near future it will be impossible for any politician to be elected on any platform that might reverse this budget deficit platform.

A continued exodus of taxpayers will exacerbate this problem. The continue growth of residents that need more help will drive it even faster.

If you are a homeowner in California, you may have seen the high water price for that asset in 2007. Good luck.

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