Well, it would appear that already California cannot service its debts!
http://www.latimes.com/news/local/la...,4472460.story
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California controller to suspend tax refunds, welfare checks, student grants
John Chiang announces that his office will suspend $3.7 billion in payments owed to Californians starting Feb. 1, because with no budget in place the state lacks sufficient cash to pay its bills..................."