The California Threat -- Will fiscal collapse destabilize world?

The California Threat
Will fiscal collapse destabilize world?

Washington Post --June 16

Calif. Aid Request Spurned By U.S.
    The Obama administration has turned back pleas for emergency aid from one of the biggest remaining threats to the economy -- the state of California.
    Top state officials have gone hat in hand to the administration, armed with dire warnings of a fast-approaching "fiscal meltdown" caused by a budget shortfall. Concern has grown inside the White House in recent weeks as California's fiscal condition has worsened, leading to high-level administration meetings. But federal officials are worried that a bailout of California would set off a cascade of demands from other states. [...]
    "A fiscal meltdown by California or any other large state or municipality would surely destabilize the U.S., if not worldwide, financial markets,"" [State Treasurer] Lockyer wrote. If the state were to default, it could shake bond markets and undermine investor confidence in a still-fragile financial system.
    American Patrol Report eight years ago (9/28/01): " ...California is heading for a train wreck. Today, the top four percent of income-earners in California pay more than 50% of all income taxes... When the next downturn comes, and it will, state revenues will disappear overnight..."