Skip to comments.California Won't Accept Its Own IOUs
Posted on 08/09/2009 4:51:50 AM PDT by TigerLikesRooster
California Won't Accept Its Own IOUs
By MARIA DINZEO
SAN FRANCISCO (CN) - Small businesses that received $682 million in IOUs from the state say California expects them to pay taxes on the worthless scraps of paper, but refuses to accept its own IOUs to pay debts or taxes. The vendors' federal class action claims the state is trying to balance its budget on their backs.
Lead plaintiff Nancy Baird filled her contract with California to provide embroidered polo shirts to a youth camp run by the National Guard, but never was paid the $27,000 she was owed. She says California "paid" her with an IOU that two banks refused to accept - yet she had to pay California sales tax on the so-called "sale" of the uniforms.
The class consists mostly of small business owners, many of whom rely on income from government contracts to keep afloat. They say California has used them as "suckers" as it looks for a way to bankroll its operations while avoiding its own financial obligations.
(Excerpt) Read more at courthousenews.com ...
It s/b illegal for Calfornia to make purchases when it does not have money to make payment.
Maybe, if they can get it heard in a Federal court. State court? Not so much.
good thing that Dems and RINOs can walk on water.
I guess that California wants to decrease the number of folks willing to do business with it.
Now this is getting interesting
This is insane, people cannot cash these stupid IOU’s to pay employee’s, costs of materials, taxes.
Rush warned people about Arnold.
Liberalism is all about your money not theirs.
That simply means the state of California has defaulted on its debt.
Very unwise to hold California paper, whether it is an IOU or bond at this point.
But, even more disturbing: our federal monies, which are made of paper, have no intrinsic value (unlike gold or silver coinage) and is only valuable because the government tells us these scraps of linen paper are worth something... just like CA told people its IOUs were worth something.
Argentina, here we come!
I would argue before a court that California should not have a choice about taking their IOUs as payment. An IOU is an official recognition of debt and the “payment” would simply be a reduction in that debt. That should actually be a fairly easy win in any court.
We don’t know the whole story. What was the language on the notes? If the notes indicated they were not acceptable by the State for payments of various taxes, it might be difficult.
The vendor should have refused acceptance and continued to bill the state and adding late fees and interest.
No State Shall Make Anything but Gold and Silver Coin a Legal Tender in payment Of Debt
Uh Duh!! Like they are like worthless dude!
Just a complex way for the state to confiscate the assets of legitimate businesses while saying that it isn’t.
In other words, government gradually taking over the means of production. (see communist manifesto)
So the way I see this any contractor who has good sense will stop taking government contracts.
How long can California survive when people stop working for them?
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