Now that we’ve just witnessed the first real step towards an Irish bailout, complete with a nicely-worded statement of support from the Eurogroup, let’s turn our attention quickly to the much (much!) larger economy, whose budget deficit is basically equal to that of Ireland’s: California.
If California really gets to the point where it can’t cut any further and can’t expect to raise more taxes via tax hikes, will the rest of the US states be there with a bailout fund and a statement of support?
If you can envision Governor Jerry Brown giving a similar speech with a similar result to what you just saw, you’ve got a better imagination than we do. And the US is ostensibly much more tightly-knit than the EU, which is, after all made up of whole different COUNTRIES, each with their own people and sense of nationhood.
Anyway, the point is not to wonder whether California can pull itself back from the brink, but just as we noted above: whether if it couldn’t, if it had any hope of help from the other 49.
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