A going concern becomes insolvent when financial obligations exceed assets. Chapter 11, Title 11 is the preferred alternative to simply folding the tent. When the "concern" is the 8th largest economy in the world, folding the tent is not an option. The California budget resolution recently passed in Sacramento and now up for public approval will not solve California's endemic, systemic problems. We are destined to revisit this crisis again and again.
Nancy Pelosi, chief "pirate" on the high seas of Congress has brought $30B of (stimulus) treasure to her state. This will certainly help, but it won't solve our problems. The Federal government is invoking a virtual Chapter 11 on banks, Big 3 auto makers, and AIG - with bailout money. He who brings the money, makes the new rules. So why not do the same with the State of California. Force us to do what we cannot do: restructure the constitution and eliminate the referendum propositions that confound "government by representation". Governor Arnold Schwarzenegger promised to clean up the "special interest" groups that defy progress but he has failed. Meg Whitman, running for Governor in 2010, has taken up the torch to make California business friendly. But that will never happen as special interests are "ordained and empowered" by numerous Amendments, Propositions, and a perpetual gridlocked assembly.