California, You Used to be Cool
What happened? Now you can’t even pay your debts and have resorted to issuing IOUs. You have a deficit of $24 billion. You are sending out $3.4 billion of IOUs in July to state contractors and local governments, to residents expecting income-tax refunds, welfare grants, and college scholarships.
I know that if you don’t issue IOUs then you would run out of cash by the end of July. But don’t you understand? You’re just digging a hole and getting yourself further and further into debt. The fact that you are running out of cash already means that you’re bankrupt. Adding IOUs to the mix will only add millions of dollars in interest on top of that. How are you going to ever crawl out from under that?
And it’s not like you will be able to pay those IOUs back right away. You know that things aren’t going to turn around in the near future right? I mean, with your 11.5% jobless rate and looming storm of Alt-A and Option ARM foreclosures in the horizon, there are no green shoots to be found anywhere on the barren Inland Empire landscape.
No, we Californians won’t accept your accounting gimmicks and one-time fixes, it is part of the reason why we ended up here. We need real cuts that make a lasting impact. Yes that might add to the pain but without some sacrifice you will never become the glorious golden state of your yesteryears.
And no, if you can’t stop yourself, we need to stop you by rejecting your IOUs. We cannot perpetuate the problem. Like the shopaholic that runs up tens of thousands of dollars in credit card debt, we cannot continue to let you stick us with worthless IOUs that you might never be able to pay back. If you are allowed to do that, then can we also pay our sales, income, property, and inheritance taxes with IOUs? If not then lead by example. Make real cuts. Shrink your size. Don’t drive people, and as a result, income away.
What happened California? You used to be cool.
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