California's budget criss yet again is looming and the state may be issuing IOUs once again to cover its payments. One of the local Assemblymen introduced a bill where people and businesses that receive IOUs from the state can turn around and return those IOUs to pay their own debts to the state (car registrations, fishing licenses, back taxes, etc.) And there appears to be a fair chance for this bill to pass.
Now, on the surface, I think that it's only fair that the state should take what it is dishing out, but on the other hand, I'm wondering that with the IOUs working as a "sub-currency," how that is going to affect things in the long term. Not as much cash itself will be heading into the state coffers if citizens and businesses are returning IOUs to offset their own debt or fees, which means that more IOUs might have to be issued, leading to a downward spiral. This is the argument the governor's Department of Finance is making even though Gov. Schwarzenegger hasn't taken an official position yet.
With how crappy the job market in California has been, coupled with the crappier housing market, this is making me realize that maybe Ray and I should have moved to Colorado or overseas and live off his military pension.
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So... Fiat, fiat currency?
Just as Planned.
I find it interesting that Kentucky has a drastically higher ratio of debt to GDP than California does.
His Excellency Aethien wrote:
Almalieque wrote:
If no one debated with me, then I wouldn't post here anymore.
gbaji wrote:
I'm not getting my news from anywhere Joph.
I suggest collecting as much in IOUs as possible, and then just buying the state outright.
They should just build a chain of state stores that accept IOUs as tender and make sure that's the only way they can be redeemed for goods and/or services. Every time someone criticises this initiative, which I imagine will be a lot, the governor's department should issue a statement insisting it's a bilateral free-market solution.
MDenham wrote:
I suggest collecting as much in IOUs as possible, and then just buying the state outright.
Lady Bardalicious wrote:
MDenham wrote:
I suggest collecting as much in IOUs as possible, and then just buying the state outright.
MDenham wrote:
Lady Bardalicious wrote:
MDenham wrote:
I suggest collecting as much in IOUs as possible, and then just buying the state outright.
Surely if you own it the whole thing is already privatised?
Kavekk the Ludicrous wrote:
MDenham wrote:
Lady Bardalicious wrote:
MDenham wrote:
I suggest collecting as much in IOUs as possible, and then just buying the state outright.
Surely if you own it the whole thing is already privatised?
Seems like the smarter solution would be to stop spending so much goddamn money. 
Although the ability to net out liabilities seems like an interesting idea. International corporations do it all the time between separate international entities. The only big problem I see is lack of liquidity in the short-term, until the state can get the budget balanced with the aforementioned spending cuts.
Although the ability to net out liabilities seems like an interesting idea. International corporations do it all the time between separate international entities. The only big problem I see is lack of liquidity in the short-term, until the state can get the budget balanced with the aforementioned spending cuts.
Jophiel wrote:
I managed to be both retarded and entertaining.
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You'll always be stupid, you'll just be stupid with more information in your brain
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Sir Xsarus wrote:
Third base!
Jophiel wrote:
I managed to be both retarded and entertaining.
Kavekk the Ludicrous wrote:
They should just build a chain of state stores that accept IOUs as tender and make sure that's the only way they can be redeemed for goods and/or services. Every time someone criticises this initiative, which I imagine will be a lot, the governor's department should issue a statement insisting it's a bilateral free-market solution.
Alma wrote:
I lost my post
Demea wrote:
Seems like the smarter solution would be to stop spending so much goddamn money.
California is spending less money. Schools have shorter years and more students per class. Prisons have let out tens of thousands of prisoners. Many/most state employees have had their pay cut about 10%.
The reason for the IOU's is the inability to pass a budget, which requires 2/3 super-majorities in both houses of the state legislature.
Well, it's not only that. California is attempting to spend less many, but the revenue isn't coming in either. Gov. Schwarzenegger won't raise taxes but is trying to find creative ways to get revenue that isn't sitting well with the constituents.
Even though the state workers are having to take furlough days, the money that is saved is offset with the payroll and income taxes that could be brought in from those withholdings.
Even though state prisons are releasing inmates due to crowding issues, etc., correctional officers are still having to work overtime.
Even though the state workers are having to take furlough days, the money that is saved is offset with the payroll and income taxes that could be brought in from those withholdings.
Even though state prisons are releasing inmates due to crowding issues, etc., correctional officers are still having to work overtime.
You can't easily increase taxes enough to make a difference unless you increase property taxes, and that is not going to happen.
In a time of universal deceit, telling the truth is a revolutionary act.
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