03/29/2024

California booms, but when will it bust again?

The state averages one economic boom and one bust per decade and California’s recovery from the Great Recession now has lasted well beyond historic expectations. In other words, as Gov. Jerry Brown, the Capitol’s resident economic worrywart, often points out, California is overdue for a downturn.

That’s why he wants to squirrel away as much as politically possible of the state’s current flood of revenues, saying they’ll be needed if the economy tanks, even though his “rainy day fund” would be quickly exhausted by even a moderate recession.

Brown’s fellow Democrats in the Legislature are more inclined to spend the bounty, particularly on expanding health coverage to more of the poor, setting up a potential confrontation in Brown’s 16th and final year as governor.

Brown’s worries about the economy mirror those of Cal Lutheran University’s Center for Economic Research and Forecasting.

“We are currently forecasting a convergence in the economic fortunes of California and the nation. While California has historically grown at a rate that is significantly higher than the nation’s, 2017 may have marked a turning point,” the center’s director, Matthew Fienup, said in a recent appraisal.

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