How would you like to get paid in paper – that isn’t green?
The eighth largest economy in the world – California – is now paying off debt in IOUs, and is the only U.S. state now in a fiscal state of emergency.
We’re tracking media coverage from inside California.
First off, what does this mean for the state’s credit rating? The San Francisco Chronicle says this latest setback could lead to a credit rating in quote “Third-World territory.”
Southern California Public Radio KPCC points the finger squarely at the government.
“IOUs are an indication that the state cannot pay its bills on a timely basis. It’s a sign of the fiscal mismanagement that’s taking place. And when you have fiscal mismanagement, it can lead to further downgrades. Today, California is the lowest credit-rated state in America.”
ABC 7 News in L.A. looks at who a government dealing in IOUs is shortchanging: the employees.
“The ongoing budget battle is taking a toll on state workers. The governor is ordering they take a third day off each month without pay. That adds up to close to a 14% pay cut.”
Sacramento’s News 10 offers optimism and a way for IOUs to work for businesses.
“One bit of hope for these vendors though, there is a bill in the assembly right now introduced yesterday, that would allow people receiving IOUs to pay for their state taxes or any other fees that they owe to the state essentially, giving those IOUs back to the state, businesses are hopeful that will pass.”
Can California run on a system of IOUs?
