California and the Credit Squeeze

The Governator is complaining that California can't get access to short term financing:

It is daunting that California, the eighth-largest economy in the world, cannot obtain financing in the normal course of its business to bridge our annual lag between expenditures and revenues," Gov. Arnold Schwarzenegger wrote in a letter to the state's congressional delegation in Washington.

While the governator has a point, he doesn't bother pointing out that his esteemed state had to cover a 16 billion! budget deficit with a lot of smoke, mirrors, and borrowing (extend the pain to our kids, not us!). This might have an itsy, bitsy, tiny bit do do with banks unwillingness to lend them more cash.