Elon Musk has raised concerns about California's financial stability, suggesting the state may face bankruptcy. Governor Gavin Newsom grapples with a significant budget deficit, while Musk points to high public spending and restrictive business regulations as key issues contributing to the state's economic downturn.

Elon Musk warns California risks bankruptcy without reforms. Despite Newsom’s balanced $322B budget, experts predict $20–$30B deficits due to volatile tax revenue and federal aid reliance. A $40B wildfire aid request may add further strain.