A punk economy is doing what legislators around the country could never do: shrink state and local governments. California Governator Arnold Schwarzenegger has declared a fiscal emergency because his state is $40 billion in the red and may actually be completely busted by February. He even "ordered state officials to prepare to furlough and lay off employees to cut costs," according to Reuters, which would make the Golden State’s 8.4 percent unemployment rate still worse.
The city of Vallejo, California has already filed for bankruptcy protection and two small towns northeast of San Francisco, Iselton and Rio Vista, are "consulting with bankruptcy lawyers," reports the Wall Street Journal. State Treasurer Bill Lockyer went as far as to say, "California’s fiscal house is burning down." Taxpayers in Revolt by Doug French Read more.
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