Sunday, July 19, 2009

California IOUs

An ever-widening budget gap joined with intractable political paralysis to deliver California its biggest fiscal blow in decades on Thursday, when the state’s controller began printing i.o.u.’s in lieu of cash to pay taxpayers, vendors and local governments.

It was only the second time the state had adopted the emergency payment method since the Great Depression. The National Conference of State Legislatures had no record of any other state’s ever using them.

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