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"all Americans would have to bail out CA when the bond would mature and CA wouldn't have any money to pay it."

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Newsflash: CA has short term bonds due in June, which they can't pay, since this bond measure didn't pass. I guess CA will either go bankrupt in June, or Arnold raises taxes, or the Federal government bails CA out -- in any of these cases the Republicans can kiss CA goodbye for the next 30 years, which make the Dems, and I guess people, like you who really want to see the Dems in charge, very happy.

I'm unconvinced that things are as dire as you predict. California can have another ballot election prior to June. It just costs a little more.

Likewise, the increased revenues that California is receiving from the current recovery could open up some new financing options, as could the state selling property.

In fact, the state could sell perennial money makers (toll bridges, for instance, also airports, dockyards, forests, etc.). Or the state could lease those assets in exchange for a big upfront payment. Ditto for a deal struck by Arnold that gives the Indian casinos more slot machines in exchange for an upfront payment timed to make the June bonds.

Also, Arnold has enormous popularity. He's the odds-on favorite to win any pissing contest with the Legislature, should Arnold decide to go to the mat and let the state run out of money altogether. "They voted down my plan, and now they complain that they have no money" when said by Governor Arnold will make one heck of a soundbite on the nightly news.

FairOpinion said: "CA has short term bonds due in June, which they can't pay, since this bond measure didn't pass. I guess CA will either go bankrupt in June, or Arnold raises taxes, or the Federal government bails CA out -- in any of these cases the Republicans can kiss CA goodbye for the next 30 years, which make the Dems, and I guess people, like you who really want to see the Dems in charge, very happy."

I don't understand.

First, you refer to "short term bonds". Are these bonds or short term debt. What limits are there on the amounts of such debt and what are the terms. Who can authorize such debts? Why would they have to be paid off in June? Why not just roll them over into yet more such debts?

As for the Republicans being responsible for the coming default of Kalifornia, I don't think that it will be the Kalifornia conservatives who are blamed. I think that most of us would cut programs in this state so deeply that the jobless people who have migrated to San Francisco would borrow money to leave the state.

Finally, what model of federal bailout do you envision? Would this be just an outright grant of billions of dollars? How many billions? Would it enable reckless spending into the future? Why would Bush support this? He didn't carry Kalifornia in 2000 and probably won't in 2004.

The behavior of our state government is completely compatible with bankruptcy. That is what happens to people who spend more than they make and who borrow what they cannot repay. There is nothing unjust about bankruptcy proceedings for such people. These proceedings require that the courts take over management of the assets of the bankrupt, distribute the assets in accordance with law, and provide the bankrupt with a clean slate.

In the case of Kalifornia, the "clean slate" would leave them with creditors who would never lend to the state again, thus solving the deficit financing problem. Voters, having successfully required super-majorities for new taxes and bond issues, could rest easy knowing that the state will not spend more than they take in.