Yesterday David Axelrod, one of President Obama’s main political advisers, signaled the White House plans to abandon efforts at new stimulus after they get unemployment benefits extended:

David Axelrod appeared on This Week and acknowledged that the Administration has little chance of getting anything beyond an extension of unemployment benefits through Congress between now and the election. That extension would appear to have 60 votes whenever Robert Byrd’s replacement gets into the Senate. But that jobs bill that had all the tax extensions and infrastructure funding and summer job money? Forget it. Aid to state Medicaid programs? Isn’t going to happen. Extending the COBRA subsidy to keep the jobless covered? Nope.

Axelrod blames Congress, but he has also been pushing the president to embrace Hooverism, leaving the White House on the sidelines as Congress actively works to turn the recession into an outright depression. Both the White House and Congress appear to have embraced the argument that the public wants deficit reduction, even though all the available evidence shows the public really wants jobs and growth.

The effect of the White House’s embrace of Hooverism on California is likely to be catastrophic. As the Sac Bee reports this morning, the 2009 federal stimulus money is starting to run out, threatening to grow the state budget deficit even wider and threatening economic recovery:

Facing a dismal budget crisis last year, California relied on a federal lifeline of stimulus dollars. The cash infusion staved off the bleakest of cuts to Medi-Cal patients, welfare recipients and students.

But that money is beginning to run dry, leaving California grappling with whether to replace it by raising taxes or institute the severe cuts the state avoided last year….

The federal government last year authorized an $862 billion stimulus package that included $85 billion for California. The money accounted for about $8.7 billion of direct state budget relief in last year’s plan to bridge a $60 billion deficit over 17 months.

Federal leaders presumed that an economic recovery by next year would provide more tax revenue and pick up the slack. But California remains mired in an economic malaise, and the unemployment rate is 12.4 percent.

The only reason we’re doing as well as “mired in an economic malaise” and not seeing much higher unemployment numbers is because of the federal stimulus of early 2009. With the White House now itself embracing Hooverism, a renewed downturn here in California seems almost certain.

The expiring stimulus funds will lead to many more layoffs, and the destruction of more public services will cause small businesses to suffer as customers stay home, hoarding money to pay for the necessities for themselves and/or their families that the state used to provide.

Some voices are out there calling on the Fed or the Treasury to loan money to the states to avoid the kinds of cuts that loss of stimulus funds will force. It’s an inferior solution, but better than the alternative, and intended to appease the “deficit terrorists” on Capitol Hill.

But that seems unlikely to happen, as it misreads the motivations of the deficit hawks. They’re not moved by economic considerations – if they were they would heed the global consensus that cuts will produce an outright depression. No, the deficit hawks are actually motivated by a desire to destroy public services and social benefits. They use the deficit as a cover for their shock doctrine attack on everything from Social Security to schools. To them, a Depression is an opportunity to finish off the New Deal state, instead of something to be avoided at all costs.

There’s no doubt that Sacramento helped create the state’s budget mess through costly and reckless tax cuts. But the prime culprit in the state’s budget deficit is the recession itself. Since the federal government has now decided to throw us all to the wolves, California’s ability to deal with the budget in a way that doesn’t crash our own fragile recovery is almost totally gone.

This unsettling situation makes the November elections all the more important. If Meg Whitman is elected governor, we will face an outright Depression and a destruction of everything about this state that we hold dear. If Carly Fiorina is elected to the Senate, she will lead the fight to destroy American jobs just as she did at HP.

California’s future hangs in the balance. With the White House making the wrong decisions, it’s up to California voters to make the right ones on November 2.