“Imagine living in a prime area of California and watching your house decline by 40%, your houshold income knocked for an initial 30%, and the after-school programs and town services get cut. Now throw some fees and tax hikes on top that mess. For the coup de grace, imagine Calfornia voters sitting down each night to another wave of bailouts from Washington to financial corporations. Under those circumstances it seems quite unlikely Washington can say no, to the States.”
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How much oil is off of California’s coast, untapped due to fears about the risks of decades-old drilling technology no one in America uses anymore? Instead of the Feds giving California free money, California ought to open its outer coast to offshore drilling and issue revenue bonds backed by the future royalty income stream. The proceeds from those bonds should be enough to get California out of its fiscal hole (this time, at least).
Rationality is not high on the federal or state government’s list of how to act.