California....Bailout Needed

States will be on the of the next areas bailouts start working there way. It gets discouraging reading all this. This isn't sustainable pure and simple. The government can't do everything for everyone. Interesting article in the economist describing some of the problem.

http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=12903483

California, first in many things, is facing America’s worst budget crisis. The gap between projected revenues and spending during this fiscal year and next amounts to $41.6 billion, which is almost half the total sum that the state expects to raise next year. Unlike the federal government, California is not allowed to get out of the jam by running a deficit. It is finding it hard to borrow to meet even short-term needs. Infrastructure work has virtually stopped. If nothing is done to close the gap soon—and perhaps even if it is—the state will begin issuing IOUs as early as next month.

The WSJ had an article today stimulus proposals to states to help cover education and medicaid cost.

http://online.wsj.com/article/SB123190040557580107.html

State and local governments would benefit from more than $160 billion in federal aid under a plan pushed by House Democratic leaders in negotiations over the economic-recovery package taking shape on Capitol Hill.