Bailing Out California

Item: Schwarzenegger to U.S.: State may need $7-billion loan

Analysis: And here's betting the U.S. government won't say, "drop dead." Easily the biggest story of the day. Basically, the problem is that the credit markets are locked and even with the possibility of EERA passing, the state can't get the money it needs to function. Indeed, what happens if the credit markets stay tight? What about other states asking for money? Which claims are valid and which are copycat?  And what happens next year, when state and local governments have to cut back even more as tax revenues decline?