Should the Federal Government Bailout California?

California Bailout, Impossible or Inevitable?

New York was on the brink of bankruptcy in 1975, when the investment banker Felix Rohatyn helped oversee the city’s rescue and recovery. But California’s current problems seem to be of a different order. “I certainly don’t recall a feeling of hopelessness here as I seem to sense there is about California’s present situation,” Mr. Rohatyn told Geraldine Baum of The Los Angeles Times in a recent interview.

The Obama administration has told California not to expect a federal bailout. So how should the state deal with its $24.3 billion shortfall? Can it save itself? Or is it likely that the taxpayers of Iowa and Utah will end up picking up the tab of the state that represents an eighth of the nation’s economy? We asked Ron Paul and others for their views on what has to happen next.

• Ron Paul, Congressman and former presidential candidate
• Peter Schrag, former Sacramento Bee columnist
• Jean Ross, California Budget Project
• Louis H. Schimmel, Mackinac Center for Public Policy

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