The ongoing saga of the people who refuse to live within their means. Federal Bailout on the way?

Yahoo:

Gov. Arnold Schwarzenegger declared a fiscal emergency Monday and called lawmakers into a special session to address California’s $11.2 billion deficit.

The state’s revenue gap is expected to hit $28 billion over the next 19 months without bold action. The emergency declaration authorizes the governor and lawmakers to change the existing budget within the next 45 days.

Without quick action, the state is likely to run out of cash in February.

Schwarzenegger and Democrats have proposed a combination of tax hikes and spending cuts, but Republican lawmakers are steadfast in their refusal to raise taxes.

Lawmakers failed to reach a compromise during the special session Schwarzenegger declared last month, pushing the problem to a new Legislature that was being sworn in Monday.

The crisis worsens each week, so the Republican governor did not want to waste any time in declaring a special session, said his spokesman, Aaron McLear.

My comment: Politicians better get it through their heads that the game is over. People will not stand for higher taxes so services and spending will have to be cut. Government just like everybody else in a depression will have to shrink. I have to admit to a certain amount of schadenfreude watching these politicians struggle with the reality of a busted state budget. Cut spending and slash the size of government you are broke.

John Polomny
The Real Deal