More evidence that California is the new Greece.

As the state grapples with a horrible budget situation, Arnold Schwarzenegger is warning of pain ahead.

Specifically, according to the SacBee, Schwarzenegger press secretary Aaron McLear said:

"What you can expect generally is no taxes and terrible cuts, absolutely terrible cuts... We're not going to get through the deficit we have without some really tough decisions and some really terrible cuts."

This is going to get really ugly, and though California may stave off default, there's no way they'll be able to stave off the horrible demand destruction that will result from these "absolutely terrible cuts."

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