AS YOU are no doubt aware, California is in the midst of a major budget crisis. With the state budget seriously out of whack structurally and cyclically, budget deficits illegal, and political institutions unable to agree on spending cuts and tax increases sufficient to close the gap, the state has been forced to issue IOUs to employees and creditors. Interestingly, the government seems prepared to allow citizens to pay state obligations—including taxes—with these IOUs, and private markets may be sprouting up to buy and sell them. In effect, California may have created its own currency.
In related news, this seems like good new for Chris Dodd.
Love live Gold and 2,000,000% inflation. Screw that whole worst economy since the Great Depression and unprecedented deflationary pressure thing.
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