California is headed down the tubes. Despite Silicon Valley, Hollywood, a huge manufacturing industry, and a GDP larger than that of Russia, Canada, or India, California is likely to default.
California's debt is in junk bond territory. Unemployment is 11.5% and rising. Their deficit currently tops 24 billion, and help from Washington is not in the cards.
If California goes under, it will take the nation's purported stimulus gains with it, and then some. The entire municipal bond market will get dragged down.
And what are the Democrats in Sacramento doing? They tried to raise taxes on cigarettes and oil companies. That's the way to tighten your belt, guys! Maybe they need to head to New York for a date night.
