California's government has made commitments to employee unions and others that it simply cannot afford to keep. Unlike the federal government, the state government cannot print money and it cannot borrow unlimited amounts from investors. There can be no political solution here: The numbers are inexorable. The state must renege on its commitments big and small, and the sooner the better. The most likely scenario is legislative paralysis (due to heavily gerrymandered districts) followed by a voter revolt with meat axe propositions to default on state commitments to union employees, retirees, and other special interests that the voters will see as unreasonably privileged in hard times. This turning point will come when public employee union money is no longer sufficient to sway elections in their favor as it was in 2005. (Had Arnold Schwarzenegger resigned after 2005's electoral defeat, he might have retained his credibility and have a chance to win back the governorship in 2010.) Before placing all the blame on the voters for ballot box budgeting, recall that the voters handily approved Proposition 187, which would have denied state funding for most services to illegal immigrants. The state court overturned the voters and the state government didn't even bother to appeal. Had that measure been enforced, California's budget would be very different today. Voters are ready to give a haircut to the public employee unions and to all kinds of spending programs. Voters are hurting and they don't believe that recipients of state money deserve to be exempted from similar sacrifice. The legislative process cannot deliver default, but the initiative process can and will. California will once again lead the way for the country as a whole, where the federal government must also break all its expensive promises. Default is coming, like it or not.