California is, without a doubt, one of the most naturally blessed places in the world.

The idea of the American Dream was invented there, and during the 50s and 60s, it became the embodiment of America’s optimistic spirit. Its image was surfers, suburbs, and Silicon Valley.

San Francisco was one of the most beautiful cities in the world, and Los Angeles was Tinseltown–the place where dreams are made. New York City may have been the place where if you made it there, you could make it anywhere, but California was the place where you could lay in the sun in the morning, take a meeting on a patio, and eat exotic food while planning a new venture, and drive your nice car to your 2500 square foot house with a yard.

Today, not so much. The state is still beautiful if you ignore many of its people and politics.

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— Rhonda Rhoades (@NewWaveIngenue) December 19, 2023

Fewer and fewer people ignore the problems which have been piling up for decades. There is still much to love about California, but it is just too dysfunctional and expensive to live there if you can get out.

If you had told Americans in 1970 that Florida and Texas would be stealing citizens from California, they would have laughed. The Carolinas? C’mon! Tennessee? Ha!

But there it is. California has lost 1.2 million people in only three years. Florida gained 818,000 in the same period. Texas 656,000.

Who’d a thunk it?

It has been years since California started bleeding people, but as the Los Angeles Times notes, that wasn’t a problem because they were poor, and the rich wanted to live there. This is what I call governments “upgrading their citizens.” City and state officials want a better class of citizens, so they mistreat their poorer ones and lure the wealthy, whom they describe as the “creative class.” Raise taxes, give amenities, and cater to their virtue signaling.

Even though California has experienced lopsided out-migration for decades, the financial blow has been cushioned by the kinds of people moving into the state: The newcomers were generally better educated and earned more money than those who left.

Not now: That long-standing trend has reversed. New state-to-state migration data show that for several years, thousands more high-earning, well-educated workers have left California than have moved in.

The reversal, largely in response to the state’s high taxes and soaring cost of living, has begun to damage California’s overall economy. And, by cutting into tax revenues, has delivered punishing blows to state and local governments.

State budget analysts recently projected a record $68-billion deficit in the next fiscal year because of a 25% drop in personal income tax collection in 2023. Some city, county and other local taxing authorities, particularly in the San Francisco Bay Area, have also recorded revenue declines.

One of the most amusing things I hear liberals say is that the Blue regions pay most of the taxes, so they deserve more say in how things should be run. This always struck me as a bizarre argument from the compassionate Left, although it has the virtue of being how they honestly think.

Listen to us, peasants! We put military bases in your states, so do as we say. That’s a lot of money flowing into your state!

This formula works for a while, but it doesn’t work forever as with many such schemes. Now, even rich people are leaving California because it turns out that government amenities are not worth the cost, and all that virtue signaling can add up to some big bucks if the middle class is replaced by the poor.

But rising unemployment in the state and the growing flight of professionals, business operators and others making good salaries were also notable contributors. And those factors will be harder to reverse, at least in the foreseeable future.

“There’s a price to pay for the movement of middle- and upper-income people and corporations,” said Joel Kotkin, a fellow at Chapman University who has researched the flight from California and the resulting threat to the state’s fiscal outlook. “People who are leaving are taking their tax dollars with them.”

The accelerating exodus from California in recent years, of both companies and people, has been well documented. The pandemic-induced rise in remote work, inflated housing prices and changing social conditions have spurred more Californians to pull up stakes.

Last year, Soo-Jin Yang moved herself and her designer-eyelash business from Oakland to Las Vegas. Yang, 45, was born, grew up and went to college in the East Bay, but she said she no longer felt safe operating her company in downtown Oakland. She also wanted an easier place to do business; Nevada has fewer regulations and no personal income tax.

“Definitely the tax breaks, more affordable wages,” said Yang, who founded her beauty firm, Illumino, in 2007 and now has six employees, one of whom moved with her from California to Nevada.

In 2021 and 2022, about 750,000 more people left the state than moved in, according to recently released Census Bureau data. That was about as many as the total net loss of residents for all five years before the COVID-19 pandemic in early 2020.

California is no place to be middle class. If you are homeless, it apparently is great. You can zombify yourself and get government benefits. You can even poop on the streets, which is convenient enough if you don’t mind the stench. And if things get a bit tight you can walk into any store and steal whatever you want without consequence.

The stuff dreams are made of.

But living in an expensive s**thole isn’t so attractive to others, and without those others pouring their tax dollars into state coffers the gravy train will eventually stop.

As California’s excesses and the US government’s budget deficits have proved, unsustainable things can go on much longer than any sane person could imagine.

But what can’t go on forever simply won’t. And generally speaking, the end of the gravy train doesn’t come gracefully but with a crisis.

Will California’s crisis come this year or next? Likely not. A lot of wealth is left in that state, and it takes a while to fritter it all away.

But that crisis will come, and when it does it won’t be pretty.