In California, Even the I.O.U’s Are Owed

New York Times ^ | July 8, 2009 | Jennifer Steinhauer

[reaganaut1]

The only thing worse than being issued an i.o.u. rather than a check from the State of California may be not getting the i.o.u. at all — at least in time to meet the deadline of your bank.

But across California on Tuesday, many vendors who had been told they would receive the i.o.u.’s instead of actual money said they had not yet received them. And if they do not arrive soon, they may be hard to turn into cash.

Last week, the state began issuing the warrants for the second time since the Great Depression. It ran out of cash to pay its bills as the Legislature and the governor failed to resolve the state’s $26 billion budget deficit.

Millions of dollars in i.o.u.’s, known as registered warrants, began rolling off the controller’s presses in lieu of checks to pay taxpayers, vendors and local governments. The warrants offer a 3.75 percent interest rate when they mature in October.

In most cases, banks around the state have agreed to honor the warrants only until Friday, in hopes that the deadline will prompt lawmakers to reach an agreement. As of Tuesday, 71,810 warrants to the tune of $108 million had been printed, but many had not yet been received.

“We are out of cash now,” said Carlos Flores, the executive director of the San Diego Regional Center, which provides services to Californians with developmental disabilities. The center is awaiting a $12 million warrant. “I can pay my staff next paycheck, and that’s it,” Mr. Flores said.

[Nervous Tick]

>> “We are out of cash now,” said Carlos Flores, the executive director of the San Diego Regional Center, which provides services to Californians with developmental disabilities.

Doesn’t take long at all before the pseudo-”journalists” at NYT drift away from reporting the facts towards editorializing with bleeding-heart anecdotes, does it?

[tbw2]

IF horror stories like this turn liberals against liberalism, it’s a good thing.

[OCCASparky]

Funny how they’re not giving IOU’s to the welfare queens or illegals.

[Nervous Tick]

>> IF horror stories like this turn liberals against liberalism, it’s a good thing.

Yeah, IF.

But that’s not the NYT intent.

Their “hidden message” is, “It’s mean not to bail out Commiefornia... look at all the PAIN it causes when they can’t pay their bills. Send them more money!”

[2banana]

Why does any business in their right mind do business with the state of California not on an absolute cash/carry basis?

[businessprofessor]

The rats are playing a dangerous game of chicken. Their major constituency, public employee unions, is protected until October. The rats are hoping that other groups will pressure Republicans to cave. Unfortunately for the rats, many of the vendors are strong rat supporters. The rat plan may backfire.

[ScottinVA]

“In California, Even the I.O.U’s Are Owed”

Do the I.O.U.s then become I.O.I.O.U.s?

[Liz]

Anticipating a flood of cash-strapped recipients, Payday Loan companies began advertising instant redemptions. Liquidity will come at a stiff price, with exchange rates discounted at 40% off face value. "Given the high probability of default and the inevitable public vilification of anyone who makes a profit buying IRWs, we feel this discount rate is appropriate," explained a Payday Loan officer who would only give his name as ‘Vito.'

THE COLLECTOR---Vito's first cousin (flying in from South Jersey).

"Lessee, where'd I put dem cement overshoes."

========================================

"Ach der lieber, mama mia. Dat sobanagun Veetoe's gonna collect
Kaleefirneeah's IOU's? Duz he knowh hez puttin a Kennedee in dainjah?
Ai getda nasheenul sumpatty ven anudder Kennedee goz kaputz, ifh Mariah
putz ohn dem ceement ovahshoes."

" Chonny and Wooty, ai gotda vunny veeling dah Reepublucan Potty tinks
RINOS ass pure crapola. Ai hear RINOS kin getz jops ass Val-Mart greetahs,
Home Depoht paihnt mixahs, McD's ketchop pumpahs, undt vaitahs at Ved Lopstah."

[Bernard Marx]

IF horror stories like this turn liberals against liberalism, it’s a good thing.

But they won't. They want something for nothing and will only blame "evil" Republicans in the Legislature and hard-hearted home owners like me for not volunteering to pay huge amounts of new taxes to support the s.o.b.'s.

[tflabo]

Do the I.O.U.s then become I.O.I.O.U.s?

Sounds like a PONZI scheme in the making?

[NormsRevenge]

This morning, the ATM told me to see a representative inside the facility if I were in possession of IOUs and wanted to deposit them.

California Gubamint at its finest.

No Debacle Too Big To Fail

[Oldpuppymax]

As a businessman, I would remit an IOU to the State for my sales tax receipts, etc. Fairs fair, right!

[Caipirabob]

LOL! I have to wonder if it’s possible to declare war against a government of a state in the union. It’s been done under different circumstances, and if they touch a single fed tax dollar to resolve this issue, I’d say it was justified again.