The clock is ticking on California, which must slash its way out of a $21 billion deficit in order to stave off default (that is, if Uncle Sam doesn't extend the state a TARP bailout before then).
While the problem is serious, the state's uber-democratic system is broken beyond repair. It's truly a failed state, in the classic political science sense of the term. If it were its own country, the US would be consulting with the UN and NATO about establishing a presence and supervising elections.
So the state needs radical help, and a bailout will only make things worse.
But theoretically the state is salvageable, argues Breakingviews, if only because the state could both afford higher taxes and reduce state spending. Spending is far from bare-bones levels, and state employees are extremely well paid.
But Breakingviews actually proposes a much more radical solution, which is breaking California up into 4 distinct states (seriously). Think of it like good bank/bad bank, but for states.
Actually it's a little different. The idea is not that this will solve the state's financial problems, but that it will split it into four coherent political units, which would be:
- San Diego/Orange County/Inland Empire (socially conservative, Hispanic, heavily military)
- Greater LA (Hollywood and Hispanics, very liberal)
- San Francisco/Silicon Valley (Liberal, but very dynamic and market oriented)
- Central (Conservative, Kansas-like)
This is a political scientist's late night fantasy and doing this might actually solve some political problems, but in the end it wouldn't work.
The first state to go would be Greater LA. You see, the Hollywood liberal types may love to support government spending and immigration, but the moment the entire burden fell on them to support the rest of the population they'd scream bloody murder. You know they would. And it's probably a gloss-over to just say that the San Diego state would be solidly "conservative" just because there's a lot of military and socially conservative Hispanics there. There'd be huge public support tensions over spending and government safety nets.
Beyond that, national Republicans would never go for this, since you'd essentially be creating three new Democratic states (it sounds like Central would probably be Republican), giving Democrats permanent dominance in the US Senate.
reference: thebusinessinsider.com
