Renowned financial expert and bestselling author of “Rich Dad Poor Dad,” Robert Kiyosaki, who accurately predicted the collapse of Lehman Brothers investment bank in 2008, has recently forecasted that the state of California, also known as the “Golden State,” is facing a fate of “bankruptcy.”
Last month, Kiyosaki stated on the “X” platform, “California is in the process of going bankrupt. California will start to increase taxes, cut subsidies for the poor, prisons, environmental issues, and teachers’ unions. Additionally, crime will spread as police funding gets reduced.”
“California is a bellwether state, meaning that what happens in California will also happen in other parts of the United States,” he said.
Once the most populous state in the U.S., known for its abundant economic opportunities and freedoms, California secured its position as the world’s fifth-largest economy in 2015. However, many economists and financial experts now hold a pessimistic view on California’s future economic prospects.
In June, Governor Newsom signed a nearly $300 billion budget for the new fiscal year, aiming to cut some expenditure items, once again increase corporate taxes to eliminate a $46.8 billion fiscal deficit.
From billions in fiscal surplus to massive deficits, and with people and businesses moving away, multiple polls indicate that the main reasons for these changes are attributed to poor government management and radical policies.
Statistics show that from 2009 to 2016, a total of 13,000 businesses left California. Reasons for relocation often include California’s high tax burden, excessive regulations, among other policies.
For instance, in 2021, the world’s richest person, Elon Musk, moved Tesla’s headquarters from California to Texas citing excessive costs in California and restrictive government policies hindering business growth.
On July 16 this year, Musk announced relocating the headquarters of SpaceX and the social media company, “X,” from California to Texas due to a law passed in California a day prior concerning student privacy.
On July 15, Governor Newsom signed the controversial AB1955 bill, causing a stir. The new law prohibits educators from disclosing changes in student gender identity to parents without the students’ consent. Several organizations have initiated legal battles in hopes of halting the implementation of the new law. If the courts do not intervene, the law will take effect on January 1, 2025.
Furthermore, influential figures and companies have announced their departure from California, including Hewlett Packard Enterprise Co., Oracle Corp., podcast giant Joe Rogan, actor Mark Wahlberg, and Hollywood icon Sylvester Stallone.
According to data from the U.S. Census Bureau, nearly 800,000 people left California in 2022, seeking areas with lower living costs, taxes, and crime rates.
Kiyosaki himself admitted in his post that he has moved out of California. He believes that California serves as a precursor for other states with similar policies, stating, “If California, as a bellwether state, is on the verge of bankruptcy, which states will follow suit?”