PALM SPRINGS, Calif. -- In just a few weeks time, California hits the wall.

And Americans should take a good, long look at the fiscal and social wreck of the Golden Land, because California is at a place to which all of America is heading.

In May, when five fund-raising proposals were put on the ballot, Gov. Schwarzenegger pleaded with the overtaxed Californians not to make their state "the poster child for dysfunction."

As The Economist writes, "On May 18th, they did exactly that."

Arnold went to the White House for U.S. loan guarantees for new state bonds. But with the president's approval rating wilting because of a belief he is spending too much, the Obama-ites slammed the door.

In Sacramento, a Republican blocking force is resisting any new tax revenue. And with the state under a constitutional mandate to balance its budget, yet facing a $24 billion deficit this July, a chainsaw is about to be taken to state government.

Some 38,000 of 168,000 state prisoners may be released. As Barack Obama is pushing universal health insurance, California will cut Medi-Cal for the poor. Education will be slashed, resulting in a shortened school year, thousands of laid-off teachers, school closings and an end to summer programs in a system that has plummeted from the nation's best to one of its worst, as measured by dropout rates and academic achievement.

The 10 campuses of the University of California face cuts that may result in 50,000 fewer students and 5,000 fewer teachers.

What makes her fiscal crisis relevant to us all is not only that California is our most populous state, with one in eight Americans living there, but California has a gross domestic product larger than Canada's.

Moreover, the demography of California today is the demography of America tomorrow, just as the social and fiscal policies of California in the last decade mirror those of the U.S. government today.

One-third of all U.S. wage-earners today have been amnestied from paying U.S. income taxes, as the top 1 percent haul fully 40 percent of that huge load. So, too, in California, the well-to-do and the wealthy are hammered, which is why many have quietly closed their businesses, packed and gone back over the mountains whence their fathers came.

Under George W. Bush and Obama, the U.S. government has undertaken huge new responsibilities: No Child Left Behind, Medicare prescription drug benefits, wars in Iraq and Afghanistan, the takeovers of banks and auto companies, bailouts without end and national health insurance.

California, too, spent lavishly in the fat years and issued bonds when state revenues did not cover the costs, bringing its once-sterling credit rating down to the nation's lowest. So, too, U.S. Treasury bonds, T-bills and the American dollar are now increasingly suspect.

Demographically, California is where America will be in 2040. Continued...