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What do I think about the current economic crisis in California? We overspent. There's not a lot of insight necessary. Politicians enjoyed the strong increase in tax revenue in the late 90s and early 2000s too much, spending more than even the new taxes could cover and not saving for the proverbial rainy day. It's pouring, and we're in a pickle.
The best way to fix this would be to carefully dial back spending after reviewing what money is going where and how efficiently that money is being spent (and legalizing and taxing marijuana couldn't hurt). Unfortunately, California Democrats are against spending cuts completely and California Republicans want California to basically be without a state government, meaning they can't come to a compromise. Because those bumbling fools can't figure out that we can balance the budget if both sides compromise a little, people are now getting IOUs instead of government checks.
All of that being said, I've taken a lot of flack for being a Californian lately and I think it's because people don't really understand that what happens in California generally reflects what's happening to the rest of the country. California has relatively less debt than the federal government, and several other states (New York, Massachusetts, Illinois and New Jersey) are well on their way to going bust right behind us.
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