as goes california so goes the nation

I have always been under the opinion that what happens in California fortells what will happen in the the country in general. Culturally, trends often start in California such as fashion and media. Trends in health care such as the rise of HMOs started in California. Legal issues such as gay marriage began in the golden state. It has always been on the cusp of future developments.
This is very depressing considering what California is going through at this time. Its financial situation is essentially bankrupt. The government has spent or committed to spend more money than it has or could possibly raise through taxes and fees. The government of California has made the mistake of deciding that it is the governments role to fix the problems that effect society. This has exploded the demand for government services for which it is unable to keep up. They are in a viscious cycle where to obtain more revenue the taxes are raised which leads to an exiting of business and actually a reduction in the state's revenue, the opposite of what was intended. The loss of businesses leads to higher unemployment and more demand on government services which requires additional funds. And round and round the cycle goes.
It already appears that more states are heading into this cycle. My home state of New Jersey continues to work with defecits and cannot live within its means. The system is broken and the only way to break the cycle is to have elected politicians who will tell the people the truth that they cannot afford to spend beyond their means. They must drastically reduce their committments and must reduce the size of government. Tough choices need to be made and we must have the stomach for it. Many companies are currently going through these same problems and they must reduce their expenses or else go bankrupt. Similarly, government must do it as well. Trying to raise revenue will only exacerbate the problem.
I am pessimistic that leaders will be elected that will enact these tough choices. Too many people depend on government for welfare, food stamps, health care, and pay checks. Such people will never elect a person that will cut off their benefits. We have tipped over to the point where too many people are government dependents and their votes have been bought. They will only vote for the party and candidate that continues their benefits.
Maybe the quicker California can descend into the abyss, the quicker it can demonstrate to the country how to rebound with proper policy.