On June 30, 2009, I interviewed California Assembly Majority Leader Alberto Torrico, about the California State budget deadlock, on Pacifica Radio affiliate KMEC 105.1FM, in the Mendocino Environmental Center.
Since then, bond rating agencies have downgraded California debt to a BBB rating, one notch above junk bond status, and California is now racking up another $25 million per day in high interest debt.
The State is issuing IOUs, and, generating rules for transferring their ownership. Credit unions seem to be cashing the IOUs at face value; check cashing outlets are cashing them at face value, minus fees; and, B of A, Wells, and Chase will cash them at face value, until Friday, 07.10.2009, and possibly accept them as collateral for loans thereafter. CA's IOUs are already being traded speculatively, on E-Bay and craigslist.
The first CA IOUs were no doubt printed last week, but there's no news of a bust yet, and no one seems to know whether investigators would be federal or state employees, since counterfeiting is generally a federal crime, but, CA IOUs are the California's funny money. Any State investigators will, unless and until the budget deadlock breaks, be getting paid in CA IOUs.
Governor Schwarzenegger continues to demand repeal of environmental and labor protections in exchange for funding the most basic social services, in the end game that Assembly Majority Leader Torrico explained on KMEC last week:
I grew up around a radioactive toxic mess called the Puget Sound Naval Shipyard, in a gorgeous place, Washington's Olympic Peninsula, by way of Western Oklahoma, another gorgeous place. I'm a compulsive writer and sometimes I sign as (more...
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