As President Obama signed the American Recovery and Reinvestment Act which pledges $111billion investment and $15 in tax relief towards infrastructure yesterday, California was reeling following the issuing of 20,000 redundancy notices to governmental employees and the announcement that all 275 remaining infrastructure projects will be halted this week, reports UK newspaper, The Independent.

California is on the brink of bankruptcy as the State Senate has been unable to agree on a package of tax increases which would prevent the drastic measure. If bankruptcy prevails California will become the first ever US state to be declared insolvent.

The American Recovery and Reinvestment Act aims to create or save 3.5 million jobs in the US and by investing in infrastructure, create a sustainable stability for the economy.