State and local governments, lacking the printing press of the Fed, can only borrow or raise taxes or cut back when revenues fall. And there are real limits on the first two, especially in a depression. So kicking and screaming, they have to cut. Arnold’s proposal to temporarily cut back some of the vast, arrogant, and overpaid California bureaucracy is only the beginning. And it is just one of the silver linings in the return to economic reality we know as depression. (Thanks to Steve Bartin.)