David Tice: We are going into a depression. 15% unemployment or more on horizon.

Why is California almost bankrupt?
What is California's problem?
It's flat broke. In the original plan for this year's budget, spending exceeded revenues to the tune of $24bn. Unless the state can arrange a short-term loan of $10bn, America's most populous state will run out of cash on 28 July. True, states quite often need to borrow funds to see them through the first weeks of the financial year, but California's budget is so wildly out of wack (it has no ready cash to pay its bills) and its credit rating so low that no one on Wall Street will extend a loan on manageable terms, while Washington has so far refused to bail it out.

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So what happened this week?
Rebuffed on the tax front, the 'Governator' (as Arnie is known) has turned his back on tax rises and instead wants even deeper cuts - a 10 per cent reduction in the income of all state employees; cuts to school funding of $5bn; the sacking of firemen and policemen; an end to financial aid for university students; early release of tens of thousands of convicts; elimination of subsistence aid for one million children living in poverty; closure of 80 per cent of the state's parks.

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