Just a mere 10 weeks from the last budget crisis, California Budget Is Already in the Red:

Revenue in the three months ended Sept. 30 was 5.3 percent less than assumed in the $85 billion annual budget, state controller John Chiang reported yesterday. Income tax receipts led the gap, as unemployment reached 12.2 percent in August.

California has a $1.1 Billion drop in taxes, with a state official unemployment rate of 12.2% and one of the worst property devaluations in the country.

Manfrommiddletown already warned decreasing tax revenues will cause state budget crises in California's screwed.

Are they going to consider more cuts, maybe do something about the $10.5 billion they spend in dealing with illegal immigration? Create jobs, stop offshore outsourcing jobs? Rewrite their constitution so it's no more 2/3rd majority to get anything done? Nope. They are going to sell bonds.

The budget news comes as the most populous U.S. state prepares to sell as much as $15 billion of bonds in the next nine months to refinance debt and fund public-works projects, and as a surge in fixed-rate municipal issuance sent benchmark rates up by the most in almost four months.

Bloomberg reports that just since March 2009, California had already issued $22 billion of debt.

Do you ever feel you are watching a massive implosion and all of it could have been avoided with some sensible policies?