California’s debt is seen by investors as riskier than Kazakhstan’s, according to Bloomberg News. Five-year credit default swaps tied to California’s debt, which are a key measure of the market’s belief in the likelihood of default, are actually trading at 100 basis points above those of Kazakhstan. In other words, the market believes a developing country of just 15.7 million people is actually less likely to default on its debt than California, which makes up the eighth-largest economy in the world.

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And last week, Jamie Dimon, the CEO of JPMorgan, the nation’s second largest bank, warned that California’s $20 billion budget gap could pose a bigger risk than the Greek debt crisis.

In other news, here in the Midwest, where rational people live:

During the fat years of the mid-2000s, while most governors went on spending sprees, Indiana Gov. Mitch Daniels was trimming Indiana’s payroll, slowing the state government’s growth, and turning a $800 million deficit into a consistent surplus. Now that times are hard, his fiscal rigor is paying off: the state’s projected budget shortfall for 2011, as a percentage of the budget, is the third-lowest in the country.

Gov. Mitch Daniels this morning announced an additional $300 million to $400 million in state spending cuts, including no pay raises for state employees and a moratorium on most state building projects.

Daniels said the cuts are necessary after state revenue projections missed for the fourth straight month. State tax collections in October were $46 million, or 4 percent, short of projections.

I’m not entirely sure how much more Gov. Daniels can cut before his powers as a governor are tapped dry. For now, they’re offering voluntary unpaid leave to state employees, plus an additional 5% cut to spending on top of the 5% whack back in July. Forgoing pay raises for this year will save the state an additional $20 million. The last arrow in his quiver is going to be employee furloughs for weeks at a time.

At least we can still claim, “We’re not California”. As Colbert said earlier this week, “California is so broke they tried burning it down for the insurance money.”

New research from Gallup indicates something totally awesome. Check out this map:

Check out Indiana! We don’t even make the Top Ten Republican States list anymore. Frankly, it’s good news for Indiana.

Then I read this disturbing story out California:

San Francisco — After a Lutheran school expelled two 16-year-old girls for having “a bond of intimacy” that was “characteristic of a lesbian relationship,” the girls sued, contending the school had violated a state anti-discrimination law.

In response to that suit, an appeals court decided this week that the private religious school was not a business and therefore did not have to comply with a state law that prohibits businesses from discriminating.

This borders on giving private schools the authority to discriminate. Maybe next year Indiana and California ought to switch shades of blue.

California may need a $7 billion emergency loan from the federal government to pay for “teachers’ salaries, nursing homes, law enforcement and every other state-funded service” this month, Gov. Arnold Schwarzenegger warns.

California is running short on cash, Gov. Arnold Schwarzenegger warns in a letter.

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California State Treasurer Bill Lockyer issued a statement a day earlier saying because of the national financial crisis, California “has been locked out of credit markets for the past 10 days.”

Thankfully, I live in Indiana where we figured out a few years back how smart it was not to spend more than you take in with taxes and other revenue:

Credit rating agency Standard and Poor’s (S&P), citing Indiana’s “continued strong management” and economic development efforts, has raised the state’s issuer credit rating to AAA, the highest rating it assigns. State officials say it is the first time in history that Indiana has attained S&P’s top credit rating.

You know, you Californians can just come to Indiana and get away from your broke crap hole. Heck, come soon and you might even get two free years of education:

The Hoosier College Promise would be available to Indiana students from families who earn about $60,000 or less annually. They would receive two years of free tuition at Ivy Tech Community College or an equivalent amount of $6,000 to use for their first two years at another college or university that is recognized by the State Student Assistance Commission of Indiana (SSACI).

Governor Mitch Daniels will ask the next Indiana General Assembly to approve the Hoosier College Promise, a program that would provide Indiana high school graduates with more affordable access to higher education.