Department Of Funny Headlines
"Borrowing $23.3 billion for state budget won't be easy, analyst says"
I would replace "easy" with "possible." Banks are hording money from the bailout because they will need to raise fresh capital in 2009. The short version is that nobody will be investing in fuck-all for the near future. This is the entire thinking behind the federal recovery package, that government has to be the spender of last resort. So any budget package that fills the gap with $23 BILLION in borrowing is about as realistic as a budget based entirely on tourism revenue gained from the new unicorn park in Gilroy.
You could potentially borrow some money, but it would either be against ourselves (by pushing the debt into the 2010-11 fiscal year, though at some point that would need voter approval because it's somewhat illegal) or by giving borrowers a federal guarantee against default, which is the whole reason why investors are wary of California right now. This is what John Chiang has called for repeatedly. To Arnold, we can just show up to market with a bunch of worthless "revenue anticipation notes" and scream "COME AND GET IT!!!"
Of course, we could also listen to Rep. Devin Nunes and enact a part-time citizen legislature while throwing every business regulation out the window.