I am not an expert in government bonds but I have heard of a distinction between "revenue" bonds and "general obligation" bonds.
I associate revenue bonds with the state authorizing the issuance of specific bonds to be paid back from a revenue stream expected to result from the proceeds of selling the bonds.
I think that Washington state may have issued revenue bonds during the WHOOPS fiasco. The utilities who were supposed to pay back the bonds ended up in bankruptcy and the bonds could not be paid. I don't know what recourse the bondholders had to the state of Washington. There may have been no recourse.
General obligation bonds I associate with improvements to the state infrastructure such as building new schools or improving highways. These bonds, at least, are issued against the "full faith and credit" of the issuing agency.
Since Davis' "deficit bonds" were not associated with any revenue stream, I assumed that they were issued against the full faith and credit of the state of Kalifornia. There is no way for Kalifornia to continue to exist without paying these bonds. Buyers will simply not buy new bonds if any of the old bonds are not being paid. I doubt that there is even any basis for choosing among various general obligation bonds, which would be paid and which not. I would be surprised if there was any way for some general obligation bonds to be in default unless they are all in default.
Years ago I remember reading about bondholders who still expected the Soviet Union to pay off bonds issued by the Czar's regime before the revolution. I don't think these bondholders made out too well but allowing nations to default on their bonds simply because of a revolution was an economically unattractive development.
Reasonably accurate presentation but .... when a state lacks "full faith and credit", as California is beginning to do then bond investors look at the credit.
No one is saying that California is going to crash tomorrow but large government entities do succumb to structural deficits and California is in serious trouble if it can't or won't moderate it's spending.
If the legislature continues to resist fiscal management, bond fund investors (Wall Street) will insist that structural changes be made in the way California budgets its money, or insist that California raise it's taxes or both before the investors will reccommend the bonds to their customers or add the bonds to their portfolios.
Under this senerio general obligation bonds have, for all intents and purposes, become revenue bonds.