Schwarzenegger declares fiscal emergency; California issues IOUs

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California is inventing its own currency

AFTER weeks of trying to fix California’s budget, Governor Arnold Schwarzenegger and state legislators have fought one another to a standstill.

A day after the state Senate failed in a late-night bid to close part of a deficit now projected at $US26.3 billion ($A32.6 billion), California Controller John Chiang took steps to begin issuing IOUs to tens of thousands of companies and individuals owed millions of dollars by the state.

Mr Schwarzenegger declared a fiscal emergency, ordering state workers to take a third unpaid day off each month.

A meeting between Mr Schwarzenegger and the state’s top four legislative leaders ended abruptly within half an hour. Assembly Speaker Karen Bass, a Democrat from Los Angeles, charged out of the Governor’s office, clearly distraught, and walked briskly down the hall.

Related articles:
State’s budget gap deepens $2 billion overnight (San Francisco Chronicle)
Schwarzenegger declares emergency in California (AFP)
Schwarzenegger to shut state offices to save money (Sydney Morning Herald)
Governor dumps plan to build prison hospitals (San Francisco Chronicle)

“He broke it. He should fix it,” Ms Bass said tersely, alluding to Mr Schwarzenegger’s refusal to accept a budget deal that would have averted IOUs but not closed the entire deficit. “Nothing more to say.”

Mr Schwarzenegger blamed legislators for refusing to meet his terms and wasting time on issues unrelated to the budget. “Right now, in the midst of a budget crisis, they are debating about cow tails, and I think that this is inexcusable,” he said, referring to a hearing on a plan to bar dairies from cropping cows’ tails.

He said he was looking forward to working co-operatively with lawmakers again but later mocked them on Twitter for the hearing.

Senate leader Darrell Steinberg subsequently cancelled all hearings on legislation not related to the budget.

LOS ANGELES TIMES

Sacramento, California
July 3, 2009

Source: The Age

1 thought on “Schwarzenegger declares fiscal emergency; California issues IOUs

  1. Jct: There’s nothing wrong with small denomination California State IOUs if I or anyone else can pay their taxes with them. When Argentina’s government workers were faced with cuts, their unions talked 6 state governments into paying them with small-denomination state bonds which could be used to pay for state services and taxes and which everyone accepted as useful currency. Best of all, when the local currency is pegged to the Time Standard of Money (how many dollars per unskilled hour child labor) Hours earned locally can be intertraded with other timebanks globally! In 1999, I paid for 39/40 nights in Europe with an IOU for a night back in Canada worth 5 Hours.
    U.N. Millennium Declaration UNILETS Resolution C6 to governments is for a time-based currency to restructure the global financial architecture. See my banking systems engineering analysis at http://youtube.com/kingofthepaupers
    Too bad California State IOUs won’t be accepted in payment for state taxes and services like state bonds were in Argentina. Too bad California State IOUs will be denominated too big to use as local currency. Too bad Argentina people were smart enough to avoid the tent-cities catastrophe and California people are too stupid to follow their example.

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