California’s controller said on Wednesday that he would have to issue IOUs in a week if lawmakers can’t quickly solve a $24 billion budget deficit, and the state’s treasurer plans to tap a reserve fund to meet debt service costs.
The measures came as a budget crisis deepened in the most populous U.S. state and the gridlocked legislature failed to pass a proposed $11 billion in cuts.
“Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression,” Controller John Chiang said in a statement announcing that he would be forced to use IOUs to pay the state’s bills beginning on July 2.
And there’s Arnie, warning Republicans that if they don’t become like him, they’re doomed. The irony is so thick you can cut it with a knife.
Want him? You can HAVE him!
I’ll take his movies (most of ’em) and his humidor. The rest I’m fine leaving on the left coast.
I wonder what kind of market will develop for California Government IOU’s. I imagine that, within a few days, they will trade at percentages of their face value, just like other “notes.” But when you think of it – – who would want an IOU from the State of California? They may trade at deep discount.