"Indebted and Unrepentant" in City Journal takes a cold look at the conflict it portends:.
. . . on one side, California and New York - two states, deeply in debt, whose wealthy are beneficiaries of the global economy - and, on the other, the solvent states of the American interior that will be asked to bail them out. This geographic division will also pit the heartland’s middle class and working class against the well-to-do of New York and California and their political allies in the public-sector unions.The wealthy and their political allies in the public sector unions? Now there's a thought I'll need to chew on for a while. Semper aliquid novus ex America.
This sets up what could be an ugly fight in which a Tea Party-inflected national Republican Party, encouraged by its strength in the interior states, forces California and New York - now heavily dependent on federal subsidies - to reduce their spending sharply. The coastal giants would no doubt respond by threatening defaults, which could affect the credit standing of the entire country, since many of the bonds are held by foreign investors. The upshot would likely be a high-stakes conflict about free trade, globalization, social class, race, illegal immigration, and public-sector unionism.