As bad as things are now with California paying people with monopoly money, it is likely to get worse. It turns out that California's problems are only partly due to its broken system of government (thanks to direct democracy). Other, more generic financial problems are also in play not only there but in most other states. And this means that the tragic academic job market, so much based on state schools is going to last quite a while unless the federal government jumps into the fray.
But is there any willingness at the federal level to increase the red ink? I am not so sure.
I am just glad I have tenure, unlike Alberto Gonzalez.