05/22/2018

California’s economy now globe’s 5th largest

However, it’s just as important to keep the new economic rankings in perspective, to wit:

—We’ve been there before. As the state Department of Finance points out, we were 5th in 2002, only to decline as the Great Recession struck a few years later, and we were in 10th place as recently as 2012.

—While the state’s economic output increased by 3 percent in 2017, the economies of five other states grew faster, topped by Washington at 4.4 percent, according to a new report by the federal Bureau of Economic Analysis. Others with larger increases than California were Nevada, Arizona, Utah and Colorado.

—The BEA report also underscored the narrowness of California’s economic growth of late. The big drivers, the agency reported, were the high-technology and health care sectors.

—Health care growth has been fueled by huge injections of federal Obamacare funds, primarily for expansion of Medi-Cal, the state’s medical program for the poor, to about 14 million Californians, more than a third of the state’s population. Obamacare is, however, under assault in Washington and its future is cloudy.

—California’s technology industry is concentrated in the San Francisco Bay Area and its explosive growth has come with high levels of transportation congestion and housing shortages and costs that threaten its future.

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