TinyTim

California's Permanent Crisis

So what happens when the rubber meets the road in a few weeks...
Assuming the State Legislators are still paralyzed & Arnie won't borrow the difference, does the State Treasurer get to pick who gets paid and who doesn't?
If he pays the banks and bondholders, do the cops and professors just go home on furlough?
If he pays the cops and pensioners, do the banks sue for default?
If so, do they get to pick the liquidated assets they like?

California's Permanent Crisis

"Schwarzenegger returned the favor, giving Steinberg a metal sculpture of bull testicles "
At least the Terminator hasn't lost his sense of humor.

I still haven't been able to discover whether a state can lawfully declare bankruptcy. If not, what happens when the payments come in short (or not).

The State and Local Government Crisis Looms Larger

"Although you may pay more taxes to the federal government, there is a good chance that the public services you are more likely to actually encounter in your life are provided by state or local governments"

Very true. So why does tax money flow from the top down instead of the bottom up? I always advocate putting the taxing entity closer to the taxed. I think it would create better fiscal checks and balances.