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CALIFORNIA ECONOMY DA
Contents
CALIFORNIA ECONOMY DA INDEX............................................................................1
SHELL.................................................................................................................................2
SHELL.................................................................................................................................3
UNIQUENESS EXTENSIONS...........................................................................................4
UNIQUENESS EXTENSIONS...........................................................................................5
LINK EXTENSIONS..........................................................................................................6
US ECONOMY KEY TO WORLD ECONOMY...............................................................7
INTERNAL LINK EXTENSIONS.....................................................................................8
IMPACTS – ECONOMIC COLLAPSE OUTWEIGHS WAR...........................................9
IMPACTS – LAUNDRY LIST..........................................................................................10
IMPACTS – BEARDEN....................................................................................................11
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a) UNIQUENESS
The California and US economy are teetering on the brink of recession.
Roger Vincent June 18, 2008, (Staff writer for the Times, “THE ECONOMY; UCLA foresees no
recession; But there will be little or no growth in GDP this year or next, Anderson experts say,” lexis)
Under pressure from falling home values, high oil prices and rising unemployment, the economy
in California and the nation will perform anemically in the coming months -- but there still
won't be an actual recession, UCLA forecasters say. "I am holding on to what is now a shaky
view: no recession this year," said economist Edward Leamer, director of the quarterly UCLA
Anderson Forecast, which is being released today. The predictions, however, call for somewhat
more pain in the months ahead than previously forecast, with little improvement this year or
next.
Not good, but not a recession, which is commonly defined as two consecutive quarters of
negative growth in gross domestic product.
"In a recession, things happen quicker and nastier," said David Shulman, a senior economist at
UCLA.
Normal growth will not resume until 2010, Shulman said.
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SHELL
c) IMPACT
Economic collapse leads to world war three.
Walter Russell Mead August 27, 1998 (Senior Fellow for U.S. Foreign Policy at the Council on Foreign
Relations, “Financial markets threaten global peace,” lexis)
Forget suicide car bombers and Afghan fanatics. It's the financial markets, not the terrorist
training camps that pose the biggest immediate threat to world peace.
How can this be? Think about the mother of all global meltdowns: the Great Depression that
started in 1929. U.S. stocks began to collapse in October, staged a rally, then the market headed
south big time. At the bottom, the Dow Jones industrial average had lost 90 percent of its value.
Wages plummeted, thousands of banks and brokerages went bankrupt, millions of people lost their
jobs. There were similar horror stories worldwide.
But the biggest impact of the Depression on the United States -- and on world history --
wasn't money. It was blood: World War II, to be exact. The Depression brought Adolf Hitler to
power in Germany, undermined the ability of moderates to oppose Joseph Stalin's power in
Russia, and convinced the Japanese military that the country had no choice but to build an Asian
empire, even if that meant war with the United States and Britain. That's the thing about
depressions. They aren't just bad for your 401(k). Let the world economy crash far enough, and
the rules change. We stop playing ''The Price Is Right'' and start up a new round of ''Saving
Private Ryan.''
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UNIQUENESS EXTENSIONS
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LINK EXTENSIONS
__) Alternative energy is expensive and would push California over the edge.
Chattanooga Times Free Press May 17, 2008 (“A Vote To Keep Your Gas Prices High,” lexis)
Adding oil production in Alaska would by no means end our need for foreign oil. But boosting
domestic supplies would give us a huge bargaining chip with which to press for lower prices for
foreign oil. Existing oil production in Alaska -- developed when technology was far less advanced
than it is today -- has not harmed that state's flora and fauna. Blocking new development on the
basis of unfounded fears of danger to wildlife has become a means to push an environmental
agenda that forsakes cost-effective traditional energy sources in favor of expensive,
inadequate and unproven alternative energy. Sen. Lisa Murkowski, R-Alaska, warned her
colleagues about what they are doing to consumers and declared: "Increasing our production is
part of a comprehensive energy policy. We cannot have an energy policy that is based on 'No.' "
__) The price of alternative energy would push California over the edge.
Christian Science Monitor January 23, 2008 (Yereth Rosen Correspondent to CSM, “In oil-rich
Alaska, an energy crunch,” lexis)
Geothermal, wind, hydro, and tidal power may hold the most promise in a state dotted with volcanoes, scoured by stiff breezes, and surrounded by water. Alaska's
Division of Oil and Gas is soliciting bids for leases to develop geothermal energy beneath Mount Spurr, a volcano on the Anchorage skyline. Fairbanks's Chena Hot
Springs Resort is renown for putting the underground heat that warms its pools to a variety of other uses. A handful of native villages have erected wind turbines,
and Anchorage's electricity cooperative has wind-power plans. Solar energy - seemingly a long shot because of daylight-deprived winters - is getting a look, with
small-scale projects face
panels installed in some communities. Even fish oil has fueled generators at Denali National Park. Such
economic hurdles, however. "Alternative energy is very expensive capital-wise," says Kohler,
whose cooperative includes wind-powered villages. Federal grants have funded villages'
alternative-energy projects, but prospects are dim for future aid, she says.
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__) If the US economy collapses, the world economy will be soon to follow.
The Austrailian June 14, 2006 (David Uren, Economics Corresponant, “US Defecit ‘risks world
recession,’” lexis)
THE head of the International Monetary Fund has warned that the US current account deficit
risks plunging the world economy into recession.
Distortions in the oil market and fears of inflation are also threats to world economic growth,
according to IMF boss Rodrigo de Rato.
Although Australia would not escape the effect of a downturn, he said he believed the Howard
Government's success in paying off its own debt gave it ''a very big cushion'' in managing a world
recession.
Addressing the National Press Club yesterday, Mr de Rato said the gathering threats contrasted with the
rapid, and increasingly broadly based, growth of the world economy, which was expected to accelerate
5 per cent this year.
''Should we describe the global economy as being as good as it gets, or too good to be true?'' he asked.
Mr de Rato described the losses on markets over recent weeks as ''a fairly modest correction of previous
increases in asset prices''. But he warned that investors were becoming increasingly risk averse.
''In the face of rising inflationary expectations and concerns that higher interest rates may
choke off growth, the balancing act that central banks around the world must undertake has
become more difficult.''
The market fall yesterday was sparked by fears that the US Federal Reserve Bank will raise rates
at its meeting at the end of this month.
Mr de Rato said Australia should aim to get its own deficit down from its present level of 6 per cent of
GDP to between 4 and 4.5. But he stressed that the IMF did not regard Australia's deficit as a threat to
its economic health.
''Australia's external deficit reflects high investment, rather than inadequate domestic saving, and
investment is especially strong in the resources sector -- which boosts prospects for future exports,'' he
said.
Australia's deficit did not need any government policy response but would look after itself as the surge
in business investment levelled off.
''A correction of your current account deficit to a more sustainable path should not create big changes in
economic circumstances.''
However, the US deficit was being used to finance consumption and this would not be supported
by other nations indefinitely. ''The risk is that if nothing is done, imbalances will not be reduced
gradually, but suddenly, and in a disruptive way.''
If investors suddenly became unwilling to hold US financial assets, the US dollar would
plummet and rates would rise, causing global financial turmoil and a recession. ''For the
world, for the region and for this country, this is a problem that needs to be addressed.''
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__) California is the testing ground for the future of America’s economy.
Reuters May 16, 2008 (James Saft, “California leads the way – to recession; INSIDE THE MARKETS,”
lexis)
One particular area of concern is the way in which California's faltering economy and rising
unemployment interact with falling home values to prompt greater rates of mortgage
defaults. This could hit banks with exposure to California in their mortgage loan portfolios, not to
mention Fannie Mae and Freddie Mac.
''There is a very strong relationship between delinquencies and the coupling of job losses with
falling home prices,'' Ajay Rajadhyaksha and Derek Chen of Barclays Capital in New York wrote
in a note to clients.
For example, in the areas of Modesto, Stockton and Merced, the unemployment rates are above 10
percent while more than 60 percent of loans are close to being underwater, or larger than the value
of the house. Serious delinquencies in those areas are above 18 percent, while the national average
is 3.6 percent, according to Barclays.
But beyond the implications for banks, California can really be seen as the testing ground for
what the U.S. consumer looks like in coming years, and how he or she manages. If, somehow,
the move from spending to savings can be done gradually, the downturn in the United States
may be gentle.
If it happens quickly, watch out.
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IMPACTS – BEARDEN
__) Economic collapse causes extinction
Tom Bearden June 24, 2000 (LTC U.S. Army now retired, "The Unnecessary Energy
Crisis: How to Solve it Quickly,
http://www.freerepublic.com/forum/a3aaf97f22e23.htm)
History bears out that desperate nations take desperate actions. Prior to the final economic
collapse, the stress on nations will have increased the intensity and number of their
conflicts, to the point where the arsenals of weapons of mass destruction (WMD) now
possessed by some 25 nations, are almost certain to be released. As an example,
suppose a starving North Korea launches nuclear weapons upon Japan and South Korea,
including U.S. forces there, in a spasmodic suicidal response. Or suppose a
desperate China-whose long range nuclear missiles (some) can reach the United
States-attacks Taiwan. In addition to immediate responses, the mutual treaties involved
in such scenarios will quickly draw other nations into the conflict, escalating it significantly.
Strategic nuclear studies have shown for decades that, under such extreme
stress conditions, once a few nukes are launched, adversaries and
potential adversaries are then compelled to launch on perception of
preparations by one's adversary. The real legacy of the MAD concept is
this side of the MAD coin that is almost never discussed. Without effective
defense, the only chance a nation has to survive at all is to launch immediate
full-bore preemptive strikes and try to take out its perceived foes as rapidly
and massively as possible. As the studies showed, rapid escalation to full WMD
exchange occurs. Today, a great percent of the WMD arsenals that will be
unleashed, are already on site within the United States itself. The resulting great
Armageddon will destroy civilization as we know it, and perhaps most of the biosphere, at
least for many decades.
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