‘California is going broke’: Robert Kiyosaki warns the Golden State will raise taxes, cut subsidies to the poor, see a rise in crime — and the rest of America will follow. Here are the facts

Note, that having a budget deficit isn't unique to state governments; it's also a national issue. In fiscal year 2024, the U.S. federal government has incurred a deficit, so far spending $1.27 trillion more than its revenue collections.

5th largest economy in the world

Despite facing fiscal hurdles, California boasts a massive economy. It’s not only the largest in the U.S. by GDP but also ranks among the largest in the world.

“California is the 5th largest economy in the world for the seventh consecutive year, with a nominal GDP of nearly $3.9 trillion in 2023 and a growth rate of 6.1% since the year prior,” Governor Gavin Newsom’s office announced earlier this year, citing data from the U.S. Bureau of Economic Analysis.

Newsom commented that his state “continues to punch above its weight, overperforming all but a handful of the largest countries in the world.”

However, critics have noted that the state still grapples with significant challenges, such as stubbornly high unemployment. According to the Bureau of Labor Statistics, California had an unemployment rate of 5.2% in June 2024 — tied for the second highest in the U.S.

Compounding the issue is the state’s high cost of living. Housing prices, in particular, have skyrocketed, making affordability a critical concern for many Californians.

According to data from real estate brokerage Redfin, the median sales price of homes in California escalated to $856,700 in June 2024, marking a 7.6% increase from the previous year. This figure starkly contrasts with the national median home sale price of $442,451, underscoring the affordability crisis many Californians face.