The scale of California’s debt crisis – the state is having to issue IOUs as it grapples with a $26bn deficit – has raised some uncomfortable questions for the US.

Is California too big to fail? If so, might the federal government be forced to nationalise it? There are those who believe California should be allowed to fail as a warning to the others. Many ordinary voters are unhappy at bailing out wealthy Californians who enjoyed a luxury lifestyle of sun and sand while their state was sinking.