The State of California has hit the fiscal wall. Public sector workers are receiving "IOUs" instead dollars as wages. Payments to suppliers are being suspended. The Governor Arnold Schwarzenegger has declared a "fiscal emergency".
It sounds chaotic and it is. How did California get into such a mess. It was simply a matter of expenditures being greater than revenues. They have a huge fiscal deficit. The state budget gap that is running at $26.3 billion , which is almost £16 billion.
What is the difference between the UK and California? We need to add a zero to our deficit. It is running at closer to £160 billion