On May 22, 2009 Governor Arnold Schwarzenegger quoted in Time

"I understand that these cuts are very painful and they affect real lives. This is the harsh reality and the reality that we face. Sacramento is not Washington -- we cannot print our own money. We can only spend what we have."

Why not? Private banks do it all the time and its legal. According to the Federal Reserve Bank of Dallas

Banks actually create money when they lend it.

According to Huffington Post there is a State owned bank that has been doing this since 1919.