California Moves Up To The 5th Largest Economy, Surpassing The UK

The State of California has moved up to the 5th largest economy in the world, surpassing the UK. California is only topped by the US, China, Japan, and Germany

California's gross domestic product rose by $127 billion from 2016 to 2017, surpassing $2.7 trillion, the data said. Meanwhile, the U.K.'s economic output slightly shrank over that time when measured in U.S. dollars, due in part to exchange rate fluctuations.

All economic sectors except agriculture contributed to California's higher GDP, said Irena Asmundson, chief economist at the California Department of Finance. Financial services and real estate led the pack at $26 billion in growth, followed by the information sector, which includes many technology companies, at $20 billion. Manufacturing was up $10 billion.

California's economic output is now surpassed only by the total GDP of the United States, China, Japan and Germany. The state has 12% of the U.S. population but contributed 16% of the country's job growth between 2012 and 2017. Its share of the national economy also grew to 14.2% from 12.8% over that five-year period, according to state economists.

California's strong economic performance relative to other industrialized economies is driven by worker productivity, said Lee Ohanian, an economics professor at UCLA and director of the university's Ettinger Family Program in Macroeconomic Research. The United Kingdom has 25 million more people than California but now has a smaller GDP, he said.

California's economic juggernaut is concentrated in coastal metropolises around San Francisco, San Jose, Los Angeles and San Diego

http://www.latimes.com/business/la-fi-california-economy-gdp-20180504-story.html

How does it compare in population with UK?

The United Kingdom has 25 million more people than California but now has a smaller GDP, he said.

@horgen: It has about half as much people as the UK.

Remember when certain fools on here said the US is better off without California? Lol

This is nonsense. Tax and spend California should be driving it's population to places like Kansas and Oklahoma.

California's companies are going to flee any moment now.

Oh no, what are the British going to do?

The same thing they always do? Insist it's all going according to plan and Lemming-jump off the cliff.

How many people hold up to that wealth?

Certainly doesn't seem a lot compared to population of California, which are struggling to get by. Lots of homeless people just pooing on the streets. It's a shithole in a lot of areas.

Liberal California, leading the nation!!!!

Congrats and it is one of the state that is most in debt also. Really great job.

@Xabiss: I can't find any anything pointing to their debt to gdp ratio being the highest. Care to point us in the right direction?

Damn. those Brits better get back to work :P

Here you go.

https://finance.townhall.com/columnists/mikeshedlock/2018/05/02/goodbye-california-new-york-illinois-blue-state-exodus-will-accelerate-n2476713

@JimB: That's what I'm saying, yep. California is set to become a ghost town of a state despite their high economic growth. It's just a matter of time.

The alt-right sympathizers, which include "true liberals"? Yes I do remember that.

@geraltofwar: Does California have massive income inequality? Sure. But that doesn’t mean it’s the “poorest” state lol. California’s problems mirror the US overall in terms of income inequality. Would you be willing to make this same argument about the US? China?

It can’t be the poorest state while also being the 5th largest GDP in the world.

@geraltofwar: "The GDP does not effect everyone who lives in poverty in California. The wealth gap between rich and poor in California is massive."

Hey, if we're abandoning the "rising inequality is good, a rising tide lifts all boats" argument, I'm on board.

NICE

I am moving to DEnver CO, and the cost of living is high. But the economy is so good that it is well worth it.

@geraltofwar: So let's address inequality. You've convinced me, California's inequality, and that of the US at large, is an issue. Let's fix that.

I guess the Brexit isn’t working quite the way Brits thought it was going to work.

LOL, townhall. Might as well quote Breitbart.

Reducing inequality? There are literally dozens of good proposals to do so, take your pick. One of the lowest hanging fruit is the minimum wage.

Daisy dukes, bikini's on top.

Maybe take some examples from literally any other developed country...

Well, at least to pro-Brexiters. Non-Brexiters, mainly in Wales, Northern Ireland and Scotland, knew this would be bad.

I do love my home state of California.

California will always have agriculture. It's not the biggest earner out there, but it's a guaranteed one.

There's also the entertainment industry, tourism, alcohol, the recently-legalized cannabis so there's potential there upwards of billions, and tech; I don't see 20-something tech people wanting to go to...where was it? Oklahoma? Not when they can live in Northern California and go surfing, skiing, and wine tasting all in the same weekend. A lot of these people have disposable income and want to spend it.

California also has quite a bit of oil, something a lot of people don't realize, in addition to other natural and renewable resources.

People forget that, sometimes, the cost of admission is worth it. Even if it seems a bit high.

Considering the Republican party obstruction to raising it at all...

@mrbojangles25: Sorry, that was intended to be intentionally ridiculous.

Perhaps the proclaimed model of "companies will always move operations elsewhere to net a 1% marginal tax benefit over other considerations" is stale. We need to ask the question "why is California so large/still growing?"

No apology needed, it's just sometimes hard to tell haha. Especially on here...

You do know right that the GDP has absolutely zero meaning as to it´s cost to Federal America right?

I know you are Canadian but didn´t they teach you anything about America up there.

This is the standard copout americans give when you suggest other countries do certain things better. What does population size have to do with wealth equality?

I assume by "diverse" you mean ethnically diverse? You'd be surprised at how ethnically diverse a lot of European countries are. Take my country for example. It very comparable to the US in term of diversity. And you're talking about cultural diversity, there's plenty of developed countries with more cultural diversity than the US.

@Jacanuk: "You do know right that the GDP has absolutely zero meaning as to it´s cost to Federal America right?"

I'm not sure if you're serious or not, but gdp has a direct effect on federal tax contributions.

Comparing the United States to one tiny nation is silly. If you wished a fair comparison, you would have to compare it to the European Union. Considering the EU can't even defend itself or keep itself together, it would be a bit unfair if even if it had managed to address wealth inequality in any sort of meaningful way.

It however has not, mostly because it is a lot harder to pull things off when you are dealing with hundreds of millions of people across a large geographic area.

You do know I am talking about the actual cost

Since Blue was talking about the benefit of having California in the union.

@Jacanuk: What costs are you referring to? Quantify them.

The payments the federal government would not have to make if California was on their own.

Isn't the expenditure about on par with revenue generated?

You have to remember when comparing the EU as a whole with the USA, that it's 28 (soon to be 27) governments vs 1 government. Some countries do better than others in Europe at tackling economic inequality, and each one has their own specific approach to this. For example Sweden and Poland have strikingly different social policies, which result in divergent levels of wage dispersion, social mobility, income inequality and poverty.

Since the USA is one country compared to the EU which is itself a union of many nations, it will always have the advantage of being far more coordinated when it comes to addressing issues such as this. So it's not really a fair comparison either, even though the geographic areas and population sizes are broadly similar.

States have their own governments as well, and such issues are often seen as the prerogative of state government. When you have states with tens of millions of people in them, some with the economies half a dozen European countries, it is mostly impossible to compare the whole of America with a tiny nation. Not to mention the fact that the legislature of our government is made up of state representatives, and our executive only has veto power.

The EU and US are not all that different.

Besides, the federal government doesn't have much in the way of power. It can't even enforce drug and immigration law nation wide. In order to do something like addressing wealth inequality they would need support from about two thirds of the states, and that is never going to happen. Mostly because the states that claim to care about wealth inequality would be footing the bill, and the money would be going to folk they consider Nazis.

Which is of course asinine. With wealth comes a liberal populous. Until there is a massive investment in urban America, particularly in infrastructure and education, red states will stay red.

True, there are certain similarities between the US and the EU, though not enough I think to make a valid comparison between the two. Many European nations match up to, or are exceeded economically by similarly sized American states, but as a whole USA dwarfs them all. So yeah, like you said it's also impossible to fairly compare America with any of them together either.

Anyway, key differences remain between the US and the EU, despite the similarities. For one, European Union countries do not form a federal entity like the 50 American states do. There isn't even much appetite, let alone a current policy to form a federal state among all 28 members. The aim of an 'ever closer union' is vaguely used from time to time, but really there is no roadmap for making it happen. It's actually a much looser union than many people realise. There isn't even a common currency among all of the member states yet, only 19 have adopted the Euro.

The federal government may not have much power, but it certainly has a lot more than the European Commission. Even with all the limitations you mentioned regarding the power of the federal government, you still have things like the Supremacy Clause where federal law supersedes state law in the event of a conflict arising. There really isn't anything like this within the EU, and therefore as an institution, it has very limited influence over social issues within the 28 member states. Just look at the current standoff between several Eastern European states and the European commission regarding democratic values. The only real leverage the EU has over them is the bloc's budget.

So yeah, as difficult as it may be for the US to achieve a common approach towards curbing wealth inequality among it's states, it's even harder for the EU, and even then nothing is legally binding. Really the EU is more of an economic union than a political one currently.

Everything I'm seeing points to California giving more in tax dollars than it receives in federal aid.

https://taxfoundation.org/states-rely-most-federal-aid/

I think you are overestimating the power of the federal government of the United States. While it has done a much better job of being 'united' then the EU, that is about the end of if. Your example of the Supremacy Clause is why I brought up the fact that the federal government can't even enforce drug or immigration law. It is also likely going to have to back down on regulation of the internet. States can ignore federal law with impunity.

Heck, I have a partial stake in an establishment that is illegal on the federal level, largely because my state has my back. Ignoring Federal Law is a common daily activity for tens of millions of Americans, and they do so under the protection of state government.

The real power of the federal government comes from state representatives, who's interests are local, not federal. The entire point of the American Experiment is a weak federal government that cedes authority to the states outside of extreme circumstance. Sweeping economic reform isn't really in it's bailiwick. FDR threatened to destroy the federal government to push through Social Security, and America's response was to make sure no president was ever able to amass that much power a second time.

Is it a perfect example? No of course not. Europe is half a world away and full of folks who don't even share a common language and don't even provide for their own defense. Of course there are major differences. It is however much closer to reality then comparing it to a tiny nation with a tiny population densely packed on a tiny amount of land. If you are going to compare Europe and America, there isn't really any way to argue that there is a better way the comparing the US to the EU.

I mean, can you come up with a better comparison?

Yeah perhaps so, you know American politics far better than I ever could. I only go by what I see and read, and federalism can be pretty complicated to get your head around at times. That's interesting about the Supremacy Clause, I'd always thought that it gave federal law priority over state law, within the limits of the constitution of course. I'll have to read up more on that, I must have got things confused there. Oh yeah no doubt it gets ignored all the time. I've heard that the possession of cannabis is technically illegal under federal law, but that isn't enforced in the states where it's been legalised, even though that's a conflict of laws there. Yeah, will definitely be worth following to see what happens in terms of internet regulation.

Ahh right, well good to hear that your state's got your back then lol. Hmm I see, didn't realise federal law was so disregarded over there. Would you say certain states (the larger/more influential ones) have more leeway when it comes to overruling federal law, or is it something that you can get away with in any state? Okay, well thanks for explaining that then. So in terms of extreme circumstances, does that include things like the same-sex marriage ruling, since I believe that was passed by the Supreme Court. Surely not all states would have initially been on board with that right?

Well it's true that when it comes to collective defence, Europe relies upon NATO, and the US has the largest budget contribution for that. With the EU not being a political union, there isn't much desire to replace NATO with a combined EU defence force, and I doubt an independent European military alliance would be something America would be too keen on either really. To be honest though, paying above 2% on defence spending does not make sense to most EU countries, outside of the security council members. The biggest threat to Europe has pretty much exclusively been Europe itself historically, and one of the greatest successes of the EU has been maintaining peace between Europeans. So yeah, I guess short of a Russian invasion don't expect to see the vast majority of European nations paying much more towards their NATO commitments in the foreseeable future.

Nope I don't believe I can, but then that's pretty much my point. I don't think they are comparable. USA is too unique a country, and much too different in how it operates in comparison to the EU. At a push you could probably say Brazil, Argentina or the Philippines are the most similar, at least in terms of politics (states, government structure, constitution etc) since they took so much inspiration from the US model.