My brother, a scenic design artist in Hollywood, who has no understanding of economics at all, summed up the California budget problem like this:
The Government asks,“Who wants ice cream?”
And everybody answers, “We want ice cream!”
The Government asks “Who wants to pay for the ice cream?”
And everybody answers “We don’t want to pay for it!”
That is the municipal fiscal crisis in a nutshell.
Cities and states have the same problem as banks and real estate did a few years ago – too much debt. It is part of the still unfolding Fiscal Crisis that started in 2007.