California: Too big to fail?

“California, the state that gave us wheatgrass, the microprocessor, and the summer of love,” said Declan McCullagh in CBS News, “is about to provide us with yet another first: a bailout of a failing state government.” The state’s voters on Tuesday “soundly rejected ballot measures calling for higher taxes” to close a huge budget deficit, so Golden State politicians will now head to Washington "hat in hand," because California doesn’t have enough cash to make it through the summer.

The consensus in the blogosphere seems to be that we have to bail out California because it’s too big to fail, said Megan McArdle in The Atlantic. “But actually, we do have a choice: we could let them go bankrupt. And we probably should." Something has to get the "lunatics in Sacramento" to understand that they have to raise taxes or lower spending, and live within their means.

It's easy to see why everyone expects California to ask Washington for relief, said John Hinderaker in Power Line. The Obama administration is printing money like it's the solution to all economic problems. Why shouldn't California try to grab some of the "funny money" for itself?

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