John Hudson wrote:
> Is California still paying state employees and institutions in IOUs after it
> ran out of money earlier this year.
No, that was pretty brief. As much political infighting as actual
necessity. The governor and the legislators holding out for no new taxes
of any sort were Republican and the State Treasurer a Democrat who was
putting pressure on them to change their minds.
> I recall that for a while the banking sector in CA was cashing these things
> for 85 cents on the dollar and that a spirited secondary financial market had
> arisen to trade these IOUs.
>
Both exaggerations, I believe. Most banks at first accepted them for
deposit like cash. When a couple of big ones said they would stop, the
State pressured them into relenting. Any secondary market was between
con artists and fools. I suppose that it was as usual, the desparate and
ignorant being hurt the most. It all blew over when a budget was passed
and the Treasurer paid out on the warrants.
The budgetary madness goes on, though.
Moose
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