What Happens When California Defaults?

[muon2]

First, investment in California government debt instruments will dry up.

Second, the question which has been lingering for nearly fifty years is whether the judiciary can order tax increases (there was an interesting case in Kansas City schools on that issue many years ago).

Third, can a judge and/or his representative order spending reductions?  The D.C. case may shed some light.

Fourth, the chances of the California government getting its act together (slim to none).

The role of the judiciary will be interesting should events continue in their current direction. Generally, it would be up to the state supreme court, since it is a question of the action/inaction of the state legislature. In that case it may come down to the wording in the state constitution.

If a state fails to support a federal mandate, there may be a question that federal courts can take up. Medicaid services might fall in this category, since half the money come from the state for the federal program. Of course, the feds could step up and cover the cost of their mandates, rendering that issue moot.

[muon2]

I think that's true of most places. There's been some furor over the possibility of the City of Virginia Beach charging a fee for trash collection (they don't currently). You mean the garbage trucks don't run on fairy dust and love?

It is true of most places, and the larger the unit of government the more difficult the task of understanding all the pieces that make up that government. Government works when the public invests a certain responsibility in the elected body by giving them the tools to balance revenue and expenses. The public must then take the responsibility to enforce that responsibility through elections. CA seems to have removed responsibility from the legislature then decided not to take responsibility themselves.