Unfortunately that trick will not with with California because the money they need will not be used to create infrastructure which in turn could be used to pay back the debt as it was in this example. Borrowing now will just lead to more and more borrowing with little realistic chance of ever digging themselves out of the hole unless they bite the bullet now.
http://www.cnbc.com/id/31706523 Nassim Taleb, author of the Black Swan, has similar thoughts as me apparently. ---- Anything that's fragile like the financial system will eventually crash, he said. "We're in the middle of a crash," Taleb said. "So if I'm going to forecast something, it is that it's going to get worse, not better." The government needs to deleverage debt and not try stimulus packages that will inflate assets, he said. "What makes me very pessimistic in not seeing any leadership or awareness on parts of government on what has to be done, which is deleverage $40-to-$70 trillion," Taleb said. "The monkey on our back is debt," he added.
My guess is that the politicians worried about votes will try and spend their way out of this crisis. Gordon Brown of UK holds these socialist views. He is now proposing to GIVE another 100 billion to the 3rd world to help them with their energy needs, while Britain is falling apart. Quite mad poor fellow but we are lumbered with the idiot for a few more months. The US got rid of their loser Bush now it's our turn.
Ridding one's self of a loser and replacing him with a bigger loser is not a win... not even in the USSA.
Costs > Revenues, this is California's problem. They are in the whole 24 billion, because they spend too much North Dakota is solvent not because of their state bank but because: 1) They are not full of lecherous illegal immigrants 2) They are not full of scum sucking socialist aholes who want to dictate to the masses. 3) They are not full of dope smoking idiots who keep supporting 1 & 2. Fix those 3 problems and CA problems are all but resolved with or without state banks. in the Meantime "Hey, California Drop Fucking Dead!"
Hey...California was based on the concept of a free ride. Back when California was called "Alta California" before it became a state, nobody wanted to live here. Then some guy yelled "Gold" and everyone flocked here. And over the years people have yelled different but similar things to get people here on the premise of a free ride. Like "Come to CA and be a movie star and make millions!" or "Come to CA from mexico and make 10 times what you make in mexico working as a laborer" Or "Come to CA and buy a house for 500k this year and sell it next year for 1 million!" All those situations didnt work out as planned for at least 95% of those people, but it got them here, it got them working and it got them paying taxes. But now Californias problem is they want to make sure EVERYONE gets a free ride. That promise of a free ride for everyone has been going on for 150 years and now they want to deliver.
The Eagles' song "The Last Resort", which is about California, (written by Don Henley who also wrote "Desperado) ends with the line..."...You call someplace paradise, kiss it goodbye..."