From what I understand, Governor Schwarzenegger’s 2008-2009 Budget for California includes a 10-percent across-the-board spending reduction, because he wants there to be a linkage between tax revenues and spending. He wants to sell bonds to avoid a shortfall in California’s cash reserves but does not seem to want to use any of that income to pay back old bonds. Instead, he wants to reduce spending.(http://www.ebudget.ca.gov/BudgetSummary/GOV/1249556.html) Well, the word deficit does not mean bonds outstanding. It means spending more than income, and money from selling bonds is income. Therefore, California’s income does not need to be form taxes. All it needs to be is from selling bonds. California does not need to reduce spending at all. If fact, my reading of the U. S. Constitution is that the states have the franchise to coin their spending money. The only reason for California to sell bonds that I can think of is to give persons something that will last to invest in. With a positive attitude, selling bonds to pay back bonds would be like mining gold, with the bonds outstanding being a positive measure of the state’s wealth. I’m old enough to know my opinion is conservative.