I can't get this thought out of my head...
"The State of California will gladly pay you Tuesday for a hamburger today"
For anyone who's not following the story, or has money coming to them for work they did for the State... California sent out $3.3 billion in IOU’s. Instead of cash, those who do business with California will get a slip of paper.
Technically, and since the Bank of America is accepting it - along with the paltry amount of interest generated by this 'bond-like' issue of paper - it's legal tender being printed by the Treasury of California. Hey, they're already two steps further along the secession than Texas right now! And speaking of secession - the people of California had better hope that paper being printed is worth more than Jefferson Davis Confederate Notes.
And it seems that the ratings agencies are downgrading the notes to BBB status.
That puts your notes at .85 cents on the dollar.
But, there is a chance you can sell 'em on eBay as a souvenir.
In the meantime, the folks who are paying attention - or at least should be - would be the Democrats in Washington. It seems that the healthcare discussion is hinging on the very openly public fiasco in California. There's a place to point to now. A wagging finger of shame - over spending makes your economy crap out. And your dollar becomes 'worth-less' than what you owe.
Granted, California's orgy of spending and programs to solve all of the voters problems makes Obama's Third Stimulus package (to be fair, the first was George Bush's in April '08) makes DC spenders look armature in comparison. The California deficit this year is now north of $26 billion. The U.S. federal deficit will be, according to the latest numbers, almost 70 times larger.
Wonder if anyone will notice? Will it kill Obama's plans?
Hopefully, the increasing public concern about deficits - heightened by the California crisis, there are two possibilities. Either the Obama plan will come crashing down or Senate Democrats will concoct some bill that has health in the title but costs almost nothing and does even less - which is expected, except for the cost part. With Al Franken arriving in the Senate and providing Democrats with that crucial 60th vote, the latter seems most likely. Let's hope.