More I.O.U.'s Coming
California is in serious financial crisis. Last year they didn't have the money to give income tax refunds...so instead taxpayers received I.O.U.'s from the Golden State.
State Treasurer Bill Lockyer warned Saturday that California could face the unwelcome prospect of issuing IOUs in April or May if legislators and Gov. Jerry Brown do not act quickly to solve the state's fiscal problems.
The severity of California’s yawning budget gap, estimated at $25.4 billion, is widely known. But Lockyer’s comments, at a conference at UC Berkeley, were the first to suggest that the state government is staring at a more immediate cash crisis that could require IOUs.
The state last issued billions of dollars in the worthless scrip in 2009, causing a cascade of headlines around the world about the California’s fiscal dysfunction.
Lockyer, a Democrat, offered a clear prescription to avoid repeating that fiscal calamity: "Get a budget adopted that's honest, and make the cuts as soon as possible."
Brown, who took office less than three weeks ago, has called on the Legislature to enact by March 1 an austere spending plan that includes deep cutbacks to welfare, healthcare for the poor and the state's universities, among other programs.
"Get it done, the sooner the better," Lockyer said Saturday during his appearance at a conference sponsored by the Institute of Governmental Studies. If not, he said, "We will run out of money to pay the bills."
See it here; http://latimesblogs.latimes.com/california-politics/2011/01/california-treasurer-ious-could-loom-in-april-may.html
Get ready Mr. Obama...I have a feeling that California, New York, New Jersey and maybe Nevada, will soon be asking for the Federal Government to give them some newly printed money. Or they may ask you to see if the U.S. Treasury can sell some more bonds to some more foreign countries....so you can then give the money to the bankrupt states.
If that happens then ALL of us can be on the hook for the states who were the most irresponsible....and who came up with the most unsustainable programs.
Remember, if California was its own country it would have the 7th largest economy in the world...so it will be no small deal if they come crashing down.