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CALIFORNIA: Lockyer warns IOUs likely if budget talks fail
SacBee: Capitol Alert ^ | 1/22/11 | David Siders

Posted on 01/23/2011 2:20:07 PM PST by SmithL

The state could begin issuing IOUs in April or May if Gov. Jerry Brown and the Legislature fail in their budget negotiations, state Treasurer Bill Lockyer said this afternoon.

IOUs could be required if the state is "unable to meet the self-imposed deadlines by the governor and the Legislature to adopt a budget in a timely way," . . .

(Excerpt) Read more at blogs.sacbee.com ...


TOPICS: Extended News; Government; Politics/Elections; US: California
KEYWORDS: budget; goldenstate; iou; obamanomics; yourtaxdollarsatwork

1 posted on 01/23/2011 2:20:09 PM PST by SmithL
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To: SmithL

Pretty soon no company will want a state contract.

hey, that’d be a great thing.


2 posted on 01/23/2011 2:21:46 PM PST by GeronL (http://www.stink-eye.net/forum/index.php)
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To: SmithL

Aren’t IOU’s “deficit spending?” One would think that if you can’t write a deficit, then you can’t write an IOU.


3 posted on 01/23/2011 2:21:53 PM PST by Brilliant
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To: SmithL

“The state could begin issuing IOUs in April or May if Gov. Jerry Brown and the Legislature fail in their budget negotiations”

Sounds like we have been down this road a number of times now.


4 posted on 01/23/2011 2:22:34 PM PST by Parley Baer
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To: SmithL

I think this time our County government will have to shut down programs and lay people off. There are no longer any reserves to “float” a loan to the State to pay their reimbursement bills for program services. It no longer matters what the law mandates, the cupboards are bare and there simply are no more funds to continue without prompt payment. Facts is facts.


5 posted on 01/23/2011 2:25:33 PM PST by marsh2
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To: Brilliant

“Aren’t IOU’s deficit spending?”
Only if you expect to honor the IOU at some point in the future.There’s been a lot of default/bankruptcy talk lately in California.IOU holders could be royally screwed.


6 posted on 01/23/2011 2:26:14 PM PST by Farmer Dean (stop worrying about what they want to do to you,start thinking about what you want to do to them)
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To: SmithL

IOUs... bonds without a meeting of the minds, or an exchange of cash. Low credit rating, too.


7 posted on 01/23/2011 2:26:18 PM PST by Pearls Before Swine (/s, in case you need to ask)
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To: Farmer Dean

I would suggest that the bankruptcy law be written to force the State to sell off its lands. The libs need to receive some sort of punishment for causing this mess, and if they see their prize State parks sold off for development, they won’t have as much enthusiasm for deficit spending in the future.


8 posted on 01/23/2011 2:30:31 PM PST by Brilliant
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To: SmithL

California -

Inept spending: check.
Corrupt politicians: check.
Rampant drugs: check.
Largely uneducated (and therefore leftist) population: check.
Spanish the dominant language: check.

Why not just cede the sewer-hole to Mexico now.

It’s essentially a part of it already.

Bonus, they get Hollywood with the bimbos and bimboys.


9 posted on 01/23/2011 2:34:06 PM PST by Da Coyote
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To: GeronL; SmithL; Brilliant

10 posted on 01/23/2011 2:39:32 PM PST by 4Liberty ( How do you spell "moral hazard"?: $ 19, 0 0 0, 0 0 0, 0 0 0, 0 0 0.)
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To: SmithL

Since they will be issuing IOUs in lieu of tax refunds, will they accept IOUs in lieu of tax payements?

Somehow, I doubt it.


11 posted on 01/23/2011 2:40:06 PM PST by Cicero (Marcus Tullius)
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To: SmithL

Companies that do business with the State of California will have to take IOUs so that the politicians can continue to buy votes with cash. Sending out IOUs to all the millions of voters who are on the public tit might cause them to vote for someone other than the incumbent. That would be unthinkable.


12 posted on 01/23/2011 2:41:14 PM PST by Steely Tom (Obama goes on long after the thrill of Obama is gone)
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To: Farmer Dean

>> IOU holders could be royally screwed.

I wonder who in their right mind would sell to (or perform services for) the state of CA for an IOU. It’s not like their near-bankrupt condition isn’t well known.


13 posted on 01/23/2011 2:43:18 PM PST by Nervous Tick (Trust in God, but row away from the rocks!)
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To: SmithL

Get your tax returns in early if you’re expecting a refund.


14 posted on 01/23/2011 2:44:04 PM PST by jiggyboy (Ten percent of poll respondents are either lying or insane)
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To: Nervous Tick

Hey,it’s California.Less than half the residents are in their right mind.


15 posted on 01/23/2011 2:45:46 PM PST by Farmer Dean (stop worrying about what they want to do to you,start thinking about what you want to do to them)
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To: marsh2

California’s budget is quite complicated. UCLA and Berkeley, two universities that I WISH would close down, are extremely well insulated against any budget cuts. Places like CSU Chico, Northridge and San Diego State are in serious trouble.


16 posted on 01/23/2011 2:47:44 PM PST by whitedog57
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To: SmithL
How do you cash an "IOU?" Will local banks be willing to pile up these scraps of paper? For how long before the banking authorities step in, or the Boards of Directors?
17 posted on 01/23/2011 2:48:48 PM PST by hinckley buzzard
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To: SmithL
States don't actually go bankrupt.

It just get to the point where nobody will buy their bonds and ALL suppliers, from electricity to Technology Services will demand their cash up front.

And that means there are no infrastructure improvements of any kind until they get their act together.

Who is going to buy $10bil in CA State bonds to finance their light rail project? I think only the Fed, if they could. Anyone else would insist on 100% interest or more.

In fact, I don't they'll sell at any price.

18 posted on 01/23/2011 3:03:52 PM PST by Mariner (USS Tarawa, VQ3, USS Benjamin Stoddert, NAVCAMS WestPac, 7th Fleet, Navcommsta Puget Sound)
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To: SmithL
California could sell off its real estate assets to balance their budget. That way they'd get new property tax payers and get the money for coastlines, forests, and desert lands. OTOH, they could take the National Parks away from the federal government and sell those properties too. They’d get new taxpayers and land owners that wouldn't appreciate Mexican marijuana growers on their property.
19 posted on 01/23/2011 3:04:49 PM PST by vetvetdoug
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To: Da Coyote
"Largely uneducated (and therefore leftist) population: check. Spanish the dominant language: check."

You don't know what you are talking about.

Neither of those statements is true.

20 posted on 01/23/2011 3:06:26 PM PST by Mariner (USS Tarawa, VQ3, USS Benjamin Stoddert, NAVCAMS WestPac, 7th Fleet, Navcommsta Puget Sound)
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To: Brilliant

Also require all union contracts, government agencies, and mandated spending to voided.

Reboot California!


21 posted on 01/23/2011 3:11:29 PM PST by TenthAmendmentChampion (Darwinism is to Genesis as Global Warming is to Revelations.)
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To: SmithL

I just sent in my IOU to the FTB for my quarterlys


22 posted on 01/23/2011 3:26:27 PM PST by al baby (Hi Mom!!! <sarc>)
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To: SmithL
state workers should get the first ones...
23 posted on 01/23/2011 3:31:02 PM PST by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: SmithL

The ship of fools has sailed.

24 posted on 01/23/2011 3:36:29 PM PST by VRWC For Truth (Throw the bums out who vote yes on the bailout)
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To: vetvetdoug

The state would prefer to tax you such that you sell your property, at a discount, to them. It’s a win win. They get high taxes, and eventually your property.


25 posted on 01/23/2011 3:41:22 PM PST by Leisler (They always lie, and have for so much and for so long, that they no longer know what about.http://ma)
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To: SmithL

I know that the federal and state governments just sent us the first of several bills for overpayments starting in 2006-07 for administering their mental health program. All totaled, we are anticipating about an $8 million bill through 2010. We are currently laying off staff and reducing services by 70% regardless of mandated services, but we still don’t have the money and, with reduced staff, have no way to earn it. Shall we shut the whole County government down and dump it all back in their laps? - bacause that is where we’re heading.


26 posted on 01/23/2011 4:05:12 PM PST by marsh2
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To: marsh2

“Shall we shut the whole County government down and dump it all back in their laps? - bacause that is where we’re heading.”

Yes. Call their bluff.


27 posted on 01/23/2011 4:17:42 PM PST by flaglady47 (When the gov't fears the people, liberty; When the people fear the gov't, tyranny.)
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To: hinckley buzzard
Will local banks be willing to pile up these scraps of paper?

No. My last CA tax "refund" was an IOU and my credit union refused it. I had to wait several months until funding was again available to deposit it.

28 posted on 01/23/2011 4:23:32 PM PST by Bernard Marx
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To: vetvetdoug

Why would anyone buy their land? They have so many regulations and rules that if you buy the property you can’t do jack with it. You also have such high taxes and no jobs that who would want to live there?


29 posted on 01/23/2011 5:42:27 PM PST by 1scrappymom (Thanks Texas Rangers for a great run!)
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To: 1scrappymom

All businesses doing business with the State of California and insist “cash up front” or NO SALE. No materials, no services, no nothing.

The bungholes that populate the state government and its bureaucracies buy lots of stuff, so tell them that effective immediately the are on a cash only basis. If the won’t (or can’t) pay, issue them an IOU for what they would have gotten if they’d paid for it.

Cut off all credit purchases by the state from vendors and they will suddenly find things are more difficult to do — like using the copier because there’s no ink or paper for it.

Don’t accept any government credit cards for anything; cash only. California is a spoiled child with daddy’s checkbook and credit cards. Time for daddy to cut junior off.


30 posted on 01/23/2011 6:54:03 PM PST by MasterGunner01 (To err is human; to forgive is not our policy. -- SEAL Team SIX)
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To: Brilliant

Not just the parks. It would free the west. Most states east of the Mississippi are majority private owned, west of the mississippi, the opposite.

CA state government should sell off as much land as possible.


31 posted on 01/23/2011 8:43:50 PM PST by BenKenobi
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To: BenKenobi

Ding, ding, ding, we have a winner! Unfortunately the Federal Government owns 45.3% of all the land in California. So I don’t see the state as being able to bail itself out by land sales, but perhaps the Feds could. I just looked at a graphic that shows that nearly half of all the land in the states west of Texas is “owned” ( really stolen) by the Fedgov. Nevada is the worst example at 84.5%


32 posted on 01/23/2011 11:49:40 PM PST by vette6387 (Enough Already!)
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To: vette6387

Have the Feds sell the land to the state at value X/acre. Have the state sell the land to the people at value Y/acre, where Y >>> X.


33 posted on 01/25/2011 2:04:43 PM PST by BenKenobi
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