"As of July 2009, California's budget shortfall was 49.3% of its general funds. States have considered drastic options to fill such gaps.
"I looked as hard as I could at how states could declare bankruptcy," said Michael Genest, director of the California Department of Finance who is stepping down at the end of the year. "I literally looked at the federal constitution to see if there was a way for states to return to territory status.""
online.wsj.com
"Territory status"?!?
Dear Fellow Americans,
Mr. G., I think they're holding out for just as much federal aid as they can get. At every step of the process. Time will tell what ultimately happens (whether the dollar gets hit substantially (even more than it already has)) because of so much deficit spending and government bailouts, etc.
Sam, a lot of Hollywood production has moved to Vancouver and Toronto, to benefit from the 20% cost discount on the currency exchange. Plus, they didn't seem to interefere very much with the affordability mortgage products which ballooned real estate. I wonder what the story on that is?
CT, that is true, I also heard of India and bollywood is improving.
Hey, I think I clearly stated that the USA can't afford for CA to go under, but it's not like they are self-sufficient at all. I dunno who's going to buy all those fruit, nuts, vegetables, milk, movies, hi-tech software, airplanes, movies, and wine inside CA if the state really does go under. 
I also don't think that there's necessarily a precedent for "federal aid" to completely balance a state's internal budget, but I'd be open to seeing some data on that.
As for the U.S. Dollar, I would argue that failed "trickle-down" economic policies & a lack of true regulation on financial institutions (all part of a horrible monetary policy of the past) has killed the Dollar. It's going to take a long while to fix that mess as well.
Mr. G.: I heard or read someplace that a chunk of the federal stimulus package has been used to prop up states. I don't recall where it was I saw it, and I don't really have the time to find it now. My apologies. If I see something in the future, I will post the link.
True regulation on financial institutions is certainly one way to look at it. But, whatever happened to self-regulation?!? When Lehman went down there was great concern whether they would crash credit default swaps others were a party to, and thereby collapse the entire financial system. Luckily the Taxpayer was found to make good on AIG's cesspool of crap (it's been widely concluded the government injection of funds into AIG was really a backdoor bailout of Goldman Sachs and other firms.) But the key is, didn't the guys working in these financial meth labs consider what they were doing when they were doing it? Or the oversight within their own firms consider what the risk was??? Those are the key questions which really need to be answered. If there ever was self-regulation, then why would there ever be a need for governmental regulation?
Well, for sure some of the stimulus money has been used by a few states to stave off a few budget cuts, but that's a far cry from basically giving a state the equivalent of somewhere in the range of half the funding that they need to keep their state afloat.
"True regulation on financial institutions is certainly one way to look at it. But, whatever happened to self-regulation?!?"
Well, I would submit that's what was tried by the Bush Regime & Alan Greenspan, and it didn't work...by Greenspan's own admission:
theaustralian.com.au
"Luckily the Taxpayer was found to make good on AIG's cesspool of crap (it's been widely concluded the government injection of funds into AIG was really a backdoor bailout of Goldman Sachs and other firms.)"
I agree that some of the main beneficiaries of the AIG takeover were not AIG themselves, but I also don't think that it was in the best interest of the USA to let one of the largest insurance companies in the world go under. They shouldn't have been allowed to get that big in the first place IMHO.
"But the key is, didn't the guys working in these financial meth labs consider what they were doing when they were doing it?"
No, it was all about making short-term money, which they did...for a while. 
"If there ever was self-regulation, then why would there ever be a need for governmental regulation?"
That's the point I think, there was never any real "self-regulation" to begin with.
CA is in one heck of a mess for sure, but what's really on display here is the unwillingness for all parties to shoulder some of the burden to get the state out of the mess that it took them a long time to get into in the first place. Dems have fought to minimize cuts to programs, while the GOP refuses to accept any tax increases. CA state employees have had to endure unpaid furloughs, the elimination of state holidays, and layoffs so far. The CA voters (due to CA's stupid statewide binding referendum law) have so far refused to accept tax extensions & money redirection into the CA general fund. The CA state sales & use tax was only temporarily increased by 1% recently. CA services (including education) have been cut by many billions of dollars recently.
What's really needed is for all sides to come together to take the remaining necessary steps, which likely include tax increases to raise more revenue & more cuts in state employments costs to lower state costs, in order to save CA. The USA can't afford having CA go under, period.