California is again going through a serious financial budgetary crisis and the juxtaposition of two major concepts of economic theory have basically competed to rule the roost in Golden State since World War II and have a had major impact on the California economy and its system of operation.

The first is Keynesian macroeconomics which main tenants according to author Dudley Dillard contends that tax cuts should be used to increase demand, not supply, and thus should be targeted at cash-strapped, lower-income earners, who are more likely to spend additional income (i.e. stimulus payments of 2008 and 2009 in the U.S.), according to author of The Economics of John Maynard Keynes: The Theory of Monetary Economy, Dudley Dillard.

Also known as Keynesianism this theory is based on the ideas of 20th-century economist John Maynard Keynes and employs a holistic approach to the notion of any given country's monetary policy taken by their central bank, in addition to fiscal actions taken by its government to stabilize financial output over any given business cycle, according to Dillard.