The state government was so deeply in debt that it began to issue IOUs instead of wages. Its unemployment rate has soared to more than 12%, the highest figure in 70 years. Desperate to pay off a crippling budget deficit, California is slashing spending in education and healthcare, laying off vast numbers of workers and forcing others to take unpaid leave. In a state made up of sprawling suburbs the collapse of the housing bubble has impoverished millions and kicked tens of thousands of families out of their homes.
Outside the Forum in Inglewood, near downtown Los Angeles, California has already failed. The scene is reminiscent of the fallout from Hurricane Katrina, as crowds of impoverished citizens stand or lie aimlessly on the hot tarmac of the centre's car park. It is 10am, and most have already been here for hours. They have come for free healthcare: a travelling medical and dental clinic has set up shop in the Forum (which usually hosts rock concerts) and thousands of the poor, the uninsured and the down-on-their-luck have driven for miles to be here.
The queue began forming at 1am. By 4am, the 1,500 spaces were already full and people were being turned away. On the floor of the Forum, root-canal surgeries are taking place. People are ferried in on cushions, hauled out of decrepit cars.
Yet California is currently cutting healthcare, slashing the "Healthy Families" programme that helped an estimated one million of its poorest children. Los Angeles now has a poverty rate of 20%. Other cities across the state, such as Fresno and Modesto, have jobless rates that rival Detroit's. In order to pass its state budget, California's government has had to agree to a deal that cuts billions of dollars from education and sacks 60,000 state employees. Some teachers have launched a hunger strike in protest. California's education system has become so poor so quickly that it is now effectively failing its future workforce. The percentage of 19-year-olds at college in the state dropped from 43% to 30% between 1996 and 2004, one of the highest falls ever recorded for any developed world economy. California's schools are ranked 47th out of 50 in the nation. Its government-issued bonds have been ranked just above "junk".
Between 2004 and 2008, half a million residents upped sticks and headed elsewhere.
Riverside is an area in the southern part of the state where the desert has been conquered by mile upon mile of housing developments, strip malls and four-lane freeways. The tidal wave of foreclosures and repossessions that burst the state's vastly inflated property bubble first washed ashore here.
One in four American mortgages that are "under water", meaning they are worth more than the home itself, are in California. In the Central Valley town of Merced, house prices have crashed by 70%. Two Democrat politicians have asked for their districts to be declared disaster zones, because of the poor economic conditions caused by foreclosures. In one city near Riverside, a squatter's camp of newly homeless labourers sleeping in their vehicles has grown up in a supermarket car park – the local government has provided toilets and a mobile shower.
For some campaigners and advocates against suburban sprawl and car culture, it has been a bitter triumph. "Let the gloating begin!" says James Kunstler, author of The Long Emergency, a warning about the high cost of the suburban lifestyle. Others see the end of the housing boom as a man-made disaster akin to a mass hysteria, but with no redemption in sight. "If California was an experiment then it was an experiment of mass irresponsibility – and that has failed," says Michael Levine.
Mendota … boldly terms itself "the cantaloup capital of the world", now has an unemployment rate of 38%. That is expected to rise above 50% as the harvest ends and labourers are laid off. City officials hold food giveaways every two weeks. More than 40% of the town's people live below the poverty level. Shops have shut, restaurants have closed, drugs and alcohol abuse have become a problem.
The state that once promised opportunities for working men and their families now promises only desperation.
Now, the future might be brighter for California than it seems - it attracts highly-educated migrants, and there's a burgeoning green tech economy, but overall, California is the poster child for capitalism. I don't mean that capitalism has gone wrong there - it's gone right. The idea is to transfer wealth from the poor masses (either through harvesting the surplus value of their labour, or by indoctrinating them into consumerism) to the bourgeoisie - except that millions of Californians are now discovering that, contrary to their understanding, they're actually the proletariat, living 50 miles away from the low-paid jobs to which they commute.
This is the world of The Shock Doctrine, Naomi Klein's term for the rightwing opportunism which sees crisis as the chance to impose savage, inhumane policies on the helpless. We aren't in a mountain of debt because Labour wasted money (the Tories keep calling it Labour's debt): we're in trouble because Labour presided over the deregulation of financial prudence and authorised greed - and the Tories only complained that they weren't deregulating fast enough. The difference between the two is that Labour could at least point to the (minimal) taxes flowing into the treasury - the Tories oppose tax and government.
So the logical outcome of Osborne's speech is that we'll see the withdrawal of comprehensive social care, healthcare, local services, bigger class sizes at all levels, less after-school activity, no school meals, more playing fields sold off, a stagnating minimum wage… and more freedom for the people who got us into this mess: their kids are privately educated and insured anyway.
If you don't believe me, look at the 1980-1987 period. That led to riots, by the way.
