Well there you go, I'm from NY and couldn't remember if it was the federal or state government.
The precedent in the private sector though has been set for granting loans and that's what you may see in California at first, but if they default what's the government going to do about it? Uncle Sam will never let California burn in flames, they'll rescue it in the end, Constitution or not.
Actually, it was Municipal Union pension funds and the sale of "Big MACs" [Municipal Assistance Corporation bonds].
California's problem is that it doesn't have New York State to 'morally guarantee' the bonds...Cali's bonding capacity is just about shot.
And remember, in 1975, the Stock Market had recovered, and union pension funds were 'FLUSH!'
Can CALPERS do the same for the state after the Greatest Bear Market in the History of Civilization???
Look, I don't have a crystal ball, but you are talking about a whole different ball game.
Perhaps the Professor isn't off his rocker after all.