The NYT reports that California may soon be asking the federal government for a $7 billion loan in the next few weeks. This would equal about $192 for each resident of the state.
The state has been locked out of credit markets during the recent turmoil, and could face much higher borrowing costs when the crunch eventually eases up.
California is hardly alone. On Wednesday, the Times reported that cities and states across the nation are being shut out of bond markets, forcing them to shelve major projects and essential services, from highway and bridge repair to expanded cancer centers. Credit that is out there will most likely be much more expensive than municipal and state governments have been used to for the past ten years.