Perfect economic storm predicted at Chico State
photo by Gary D. Brune copyright (c) 2008
One of the invited guests that presented the economic problems of the indicated California budget deficit to Lieutenant Governor John Garamendi, California State University, Chico Professor of Economics David E. Gallo made the point that the deficit is analogous to The Perfect Storm.
"My projection for Butte county is for the growth rate to drop from the 4.91% average growth rate between 2001 and 2005 to less than 0.5% for the next year," Gallo said in an email this morning after citing same yesterday.
This morning's report that the expected deficit is projected to be $20 billion. Gallo said it " is maybe a scare tactic designed to get everyone's attention regarding the severity of the problem." He expects the actual deficit to come out at between $12 to $14 billion. The discrepancy in figures comes from the unanticipated collapse of the real estate bubble.
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