John, the conclusion Paul Krugman reaches is noteworthy, although perhaps not in the way he intended. He writes:

But the California precedent still has me rattled. Who would have thought that America’s largest state, a state whose economy is larger than that of all but a few nations, could so easily become a banana republic?

On the other hand, the problems that plague California politics apply at the national level too.

This is interesting in two respects. First, it always comes as rattling news to liberals when the natural results of their policies prove unworkable. Who’d have thought that an environment of high taxes, oppressive regulation, unchecked government spending and pro-litigation rules wouldn’t bring prosperity? And who knew that the citizens of an overwhelmingly Democratic state would finally rebel against the imposition of yet another round of exorbitant taxation, huh? Yes, the liberal assumption that the populace will accept the “bargain” of ever-higher taxes for ever-higher spending never quite works out in practice.

Second, he’s right: this is a peek at what will befall us at a national level as we mimic California’s budgetary, labor, tax and regulatory policies. And so the sea of red ink swells, growth grinds to a standstill and spending soars. The national electorate and their representatives may turn out to be just as recalcitrant as their California counterparts when the cry goes out that higher — much higher — taxes are “essential.”

This really is the question before the country: do we want to be more or less like California? If the answer is “less” then we are in for an inevitable and substantial political course correction when the populace sees just how closely Obama and the Congress are following California’s model.