California’s Economy
What is economy? Little do most people know it is the backbone of everything we depend on, such as electricity, stores, schools, and hospitals. Our economy is made up of taxes, jobs, imports, exports, energy production and use, and goods and service production. These all depend on each over. Like a line of dominos, if one falls they will all fall. Our present economic situation is severe and in desperate need of repair. Every single person in California depends on the economy in one way or another. If it fails, we all suffer. A good example of where we are headed is The Great Depression, one of the worst economical eras ever. California spends more than it makes, has a huge deficit to other countries, and has the worst economy compared to all the other states in the U.S. The plans to correct these problems need to be more carefully planned out since previous attempts to fix it have done nothing but made the situation worse.
The economy is supposed to be a working team, instead, in California; it is a struggle to survive. The state spends more than it makes. California imports cost $123.0 billion dollars in January, 03. The export profit was only $81.9 billion. This means that there is a deficit of $41.1 billion in trade in just one month (BEA news 1). The huge debt there shows just how much money this state loses. Last spring, California had $8 billion surplus dollars, now it has dropped $23.6 billion dollars in deficit in total profits. This is one of the biggest drops in history (Wright 1).
We depend on other countries to help us survive as well. Japan was the best buyer of American goods, but due to its recent deflation it has been having troubles. “The Nikkei stock average, which hit a fifty-two week high of 20,833.21 last April has since lost forty-one percent of its value, closing yesterday at 12,232.98” (Calbreath 2). California spends an excessive amount more than it makes. Our Governor Gray Davis is going to use the budget to buy a $220 million dollar expansion to the death row prison system (Martin 1). This state is in debt and is spending money it doesn’t have on non-profit sections of the state, such as this prison system. We should be trying to make money, not spend more to get deeper into debt.
Due to the huge debt California will need to cut more programs, which means they will lay off workers, contractors will get less money, and less benefits payments will be given (Lav 1). “The entertainment industry lost 10,000 jobs in the past three years” says Charles B. Slocum. He is concerned about this since he is in the entertainment business. He points out that this is happening because big corporations are eliminating small businesses because they can’t compete with them. This is bad for the economy because the big studio corporations will only use the minimal needed people to do the job, which [next page]