The state is going to lose a lot of tax revenue
from this. A lot. And not just property taxes but also income tax revenue, sales tax revenue, excise tax revenue. The "multiplier
effect" which we economists love to examine will be huge and will send ripples nationwide. California companies won't
be ordering merchandise or shipping to other companies nationwide and even worldwide.
be hard hit as families don't pay mortgages or car loans and that will pressure banks to raise rates and fees.
Do you see where this is going?
Unfortunately there is no fix for this. Even huge money
from the federal government is not going to replace what is lost. At best federal money will reimburse local governments for
their expenditures to help displaced residents and to repair infrastructure as well as replace lost fire-fighting assets.
Tax breaks from the federal government will have no real impact for a year. Meanwhile unemployment will spike, retail
sales will drop.
These fires will derail all of the grandiose plans that were in the works for
our state. Any expenditures for the future will be canceled and will have to be used for immediate relief.
If you wanted something to kill that bullet train, this is it.
If you wanted something
to force a rollback of the 16-cents a gallon gas tax hike, this is it.
I only hope our Governor
sees the reality of the situation and pushes through these repeals immediately. We can't afford to spend money on a bullet
train and we can't drain families with gas tax money when so many people have been hurt.
looking at the long term which is three years out: Northern California will experience an economic boom once these communities
are rebuilt. They will be rebuilt. That will generate huge spending for construction and a huge hiring binge for construction
workers. Make no mistake about it: every disaster such as this is followed with an explosive economic recovery.
If 35-hundred houses are rebuilt that means consumers will purchase 3,500 new kitchens, and 7,000 new bathrooms,
and 7,000 new TVs, and 3,500 new air conditioning and heating systems, and carpet and tile and thousands of beds and bedroom
sets and living room and dining room furniture. There are likely to be hundreds or even thousands of new cars that will be
purchased. Then businesses will have to be rebuilt, and inventories replaced.
It's just a shame
that the price of the economic boom is the devastation, heartbreak, injuries and loss of life.