Posted on 01/27/2009 6:17:13 AM PST by kellynla
The state of California has run out of money.
Facing a $42 billion budget deficit, State Controller John Chiang told the Sacramento Bee he has already borrowed $21.5 billion to try to cover the state's checks, but by Feb. 1, there will be no more options left but to simply stop paying some of the bills – including tax refunds, welfare checks, student grants and other payments owned to California citizens.
"It pains me to pull this trigger," Chiang said at a news conference held in his office. "But it is an action that is critically necessary."
Federal law requires that many school and healthcare programs – a total of about $6.6 billion in California – must be paid, the Los Angeles Times reports, so Chiang has announced an expected payment freeze on $3.7 billion worth of the state's bills, most of it refunds owed to taxpayers.
But even with the freeze beginning next week, the Times reports, California will still fall $346 million short for the month of February, forcing Chiang to consider something only done once since the Great Depression: issuing IOUs.
(Excerpt) Read more at wnd.com ...
Raise taxes Arnold, that always fixes the problem. Give a little more to the illegals.
I’m just sitting back watching this with amusement. When the citizens keep voting these idiots into office, keep allowing this insanity to continue...well, those that fought the good fight need to get out of there quickly.
The remainder that support this? Let em deal with it.
And how many illegal aliens are getting food stamps Arnold?
I wonder what Vegas bookies will have as the over/under for the National Guard being called out in Oakland. St. Patrick’s Day?
They probably think they will be bailed out if they scream loud enough. How about closing some of these school programs?
Will California banks be accepting these warrants?
How about supermarkets, landlords, retail stores .... tax collectors?
If my state tax refund came in the form of a warrant, I’d expect to pay this year’s state and local taxes with that warrant.
Arnold the Liberal increased spending in CA, doesn’t do anything about the illegals, is pushing for different auto emission standards in different states, and wonders why his state is in financial shambles. Wake up Arnold!
Just jack up your number of exemptions to pay no tax for a month or two and then when you file roll over your refund to next year's tax to make up for it.
When will the state (union) employees stop getting paid?
so... and IOU for an IOU?
From the article:
"...after the state issued almost $4 billion worth of IOUs [in 1992], many banks stopped accepting them as deposits, claiming the five percent interest didn't pay for the hassle of processing them. The Times reports that state officials have already designed an IOU template for February and begun negotiating with banks to avoid a repeat of 1992's problems."
Note: "have begun negotiating". Uh-huh. And the banks are so much more willing to go along with unconventional financing schemes now than they were then.
Good point. I’d immediately change my withholdings on my taxes to make up for what CA says they owe me. This way I’d owe money at the end of the year and then just send them back their IOU.
I wonder how quickly we’ll see people getting scammed by “desperate single mom”s selling good forgeries at half-price on craigslist.
What about all the money you (California) are wasting on illegals. Give the illegals the IOUs (collectable in their home country).
Please don't tell me that Speaker Polesukis expects that the remaining working citizens across the US, that still have jobs, are gonna have to support her compassions for cheap illegal labor?
Look, we all know Kalifonika can hit up on all the rich actors/actresses that live their to cough up the dough to run the Dem infested state....it dah uh 0-way.
I really hope the Republicans don’t give in on this, just to bring this to a point where some of this really happens. I want to see all these lefties confronted with not getting their money, and then see how long it takes for them to throw the illegals under the bus. Something like $16 billion annually is given to these freeloaders, and then the state wonders why they are under water?
These “IOU”s are, in all respects, the issuing of credit instruments by the Treasurer. Isn’t it illegal for any entity but the Legislature to take on debt?
Wow Sten, Ben Ben and Paulsen are already using that one.....another repackaged derivative logic based smoke and mirror ploy.
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