California Budget Crisis – IOU’s Again?
The California budget is in a ‘precarious’ condition. Once again California is bleeding money, and there are not enough band aids to control the bleeding.
California Controller John Chiang has stated that the state may have to issue IOUs for the second time in as many years. California has a $20 Billion budget deficit.
“If solutions are slow to emerge and if they are neither credible nor sustainable, California will once again be unable to timely meet all of its payment obligations and my office will be forced to seek costly emergency financing, or conserve cash by delaying payments or issuing IOUs,” Chiang wrote.
The state issued $2.6 billion of the vouchers last year to pay bills, resorting to promissory notes instead of cash for the second time since the Great Depression as Schwarzenegger and the Legislature were deadlocked over how to close an imbalance that totaled $26 billion at the time. The tactic allowed it to preserve cash for the highest-priority bills, including payments to bondholders, until an accord was reached and the state was able to sell debt to generate funds. […] (Bloomberg)
When California issued IOUs last year it created more hardship for small businesses and residents who were already hurting for cash. If California repeats the same IOU program we can expect to see a trickle down effect of more small business failures and an increase in delinquency rates in all forms of credit products, including mortgage payments.
What California really needs is Independence.
California’s federal tax contribution to the wars in Iraq and Afghanistan alone is more then double our entire bogus “deficit” and the gap between what we pay into the fed in taxes and what we get back more then covers it many times over. California gets back less then $0.78 for every dollar we pay in federal taxes, compared to the entire south and the entire midwest except Illinois which all get back more then they pay in. It’s been that way since the Reconstruction started after the Civil War and it’s not going to change any time soon!
California has plenty of money to pay for everything our State needs, the problem is we’re being robbed blind by the Federal government to subsidize pork spending for southern and midwestern Senators. And, since we are dramatically under-represented in both the Senate (only 2 votes for 30 million Californians) and the House it’s never going to change as long as we remain part of the United States.
If we were an independent Nation we wouldn’t have a budget crisis, we wouldn’t have an immigration crisis, we wouldn’t be sending Soldiers and gold to fight unnecessary and illegal wars, we wouldn’t have the fed robbing our treasury and over-riding our laws, we wouldn’t be wasting billions of dollars a year incarcerating nonviolent “criminals” in the Fed’s bogus war-on-some-drugs, we’d have plenty of money to cover essential social programs, and we’d still be one of the biggest strongest economies on the planet.
California can’t afford America. That’s all there is to it.