CalExit? Probably Not

CalExit? Probably not.  Here’s why.

Today’s San Jose Mercury-News (May 10) included a column by Dan Walters.

Walters lede Calexit? Probably Not

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He points to recent comments by Governor Gavin Newsom:

Gavin Newsom isn’t the first governor to describe California as a nation-state but he has been the term’s most vociferous gubernatorial exponent.

What does it mean?

Newsom offered this explanation in a recent interview with The Atlantic magazine:

“Look, we’re the fifth largest economy in the world, 40 million strong, we’re as diverse a state as exists in this country, [with] 20-some percent of the state foreign-born.”

Toward the end, Dan makes this critical point.

In theory, therefore, it could be a financial wash were new state taxes to replace those now paid to Washington – but that doesn’t count the additional unknown costs of being a nation, such as creating and maintaining new military, diplomatic, scientific research and intelligence agencies and a central bank.

This is a point I’ve raised elsewhere. California would no longer be under the U.S. national defense umbrella.  What is the value of national defense to the state?

National defense is a public good.  It is non-rival in consumption.  Regardless of the quantity of national defense I consume there is no less available for anyone else.  And it is non-excludable.  One person, city, or state can opt out of being defended.  (An entertaining side note is people who refuse to pay the part of their federal income taxes that goes to national defense.  How, exactly, do they expect to opt out?)

The value of national defense to California is approximately equal to its gross state product.  If California became a separate country, the state would quickly be taken over by China or Russia.  Remember, the governor can no longer call Washington for military help.

Another possibility is the U.S. simply invading and making California a de facto colony.  This would eliminate the entire California government.  Which, now that I think about it, may not be such a bad idea.

It happens that California has the largest gross state product of any state.  At $2.79 trillion, it is far ahead of Texas ($1.79 trillion) and New York ($1.46 trillion).  That is the value of national defense to each state.

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