John Seiler at Cal Watchdog wrote yesterday on what happens when California repudiates its loans. Would it it be the end of the world? Probably not.
With debt service is $5.5 billion this year and will go go north of $11 billion within three years, default might actually it might be a good thing. California could sell assets, eliminate non-core programs and boondoggles like high speed rail, restructure its work force and employee agreements, as well as unfunded pension and healthcare liabilities.
This would be a good time to close down business as usual in the legislature as well.