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Bill said, "Chrysler should have been allowed to fail."....You MAKE my point. They were NOT allowed to, regardles of your opinion, or mine, of the merit of saving them. Theories and senarios are of little value. What is useful is an understanding of politics in this nation, and history. History says that if California defaults, the Congress will bail them out.

I agree with you 100% that only CUTS in spending will put California on the road to health, but my point is that Arnold won't do it, thus making the day of judgment (whenever it might be) assured. And you are right about California government workers being those who would face layoffs, etc. during an ecomonic crises, which brings us back to the POLITICAL element of a bail out.

California citizens (tax payers) are fleeing California in record numbers (so the tax base is erroding). Corporations, likewise are fleeing. Without tax relief (and regualtion relief), buisnesses will not return to California.

It is my view (although I hope to be proven wrong), that Arnold will not have the stomach, or even the inclination, to CUT TAXES, CUT SPENDING, stop handouts to illegals, and eliminate over-the-top enviornmental restrictions. What he has said on record, and those he has chosen to advise him (Buffett for example), do not send assurance my way of him being the one who will take the bull by the horns.

Impeach the Boy said: "History says that if California defaults, the Congress will bail them out. "

Please remind me of the history regarding bailout for NY. I certainly remember their whining but it would be helpful to consider what federal aid was supplied and how that might apply to Kalifornia.