Yes, Virginia....

The government of the State of California and its many subordinate jurisdictions and agencies CAN collapse in a heap of smoking rubble.

When an entity (public or private) spends more than it takes in, makes every effort to drive revenue sources away, and is de-rated by every reputable credit agency - and then tries to pay its' debts with irredeemable promissory notes....soon or late, folks catch on.

They stop doing business with such a body. They find jobs out of state. They find ways to migrate their businesses out of state. And as jobs and businesses leave, revenue drops...and when California refuses to cut programs to accommodate its newly straitened circumstances, attempting to raise new revenue by increasing taxation...we see another round of flight and failed businesses - the ones that try to stay but could not compete with other businesses operating in friendlier environments.

Yes, Virginia...California can crash'n'burn.

The lights will probably stay on. But I wouldn't give odds against the inner cities burning again as the benefit checks start bouncing, particularly if it's about the time that Officer Friendly's check begins bouncing. Or against doctors refusing to participate in public medical schemes. Or Cartel violence floating across a nearly unguarded border into San Diego and points north.

Being the 6th largest economy doesn't exempt you from economic reality. It just means you leave a much larger crater when you crash.