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NEWS > BUSINESS > CALIFORNIA IOU’S NOT WORTH THE PAPER THEY ARE PRINTED ON
CALIFORNIA IOU’S NOT WORTH THE PAPER THEY ARE PRINTED ON
July 3 2009
Sacramento, CA – From the beginning of commerce shortfalls have always been an issue. Even in the earliest days of bartering, making up the difference has been a sometimes arduous task for those whose appetites outstretch their means. With the development of money and the modern day invention of stocks, bonds, and credit, 
debt has further evolved. The economic recession that helped to crash so many major financial and bankrupt so many people of course was based largely on debt and some are just unable to dig themselves out of that hole.
Such is the case in California which is struggling under massive debt and budget shortfalls. Now the wealthiest state in the union and one of the most powerful economies in the world is so strapped for cash that they are being forced to issue IOU’s, principally for tax returns. With the forms already being sent out to customers – who will be able to redeem them at their local banks – new questions are being asked as to the physical nature of the IOU’s. Early reports indicate that many of the forms are actually worth more than the value being printed on them prompting many to question why they are being issued in the first place.
“We don’t have the money to pay our bills because the Legislature has decided that it’s more important to protect their special interests rather than protect the taxpayers,” said Governor Arnold Schwarzenegger. “We are prepared to issue $3.3 billion in IOUs in July, the bulk of which will be issued to Californians waiting for income tax refunds. Local governments will be issued IOUs as well.”
The state has stated that immediately 53.3 million dollars of IOU’s will be issued across the state. The paper being used will be of ‘the highest quality’ and will be gold embossed. Scrape TV News has learned that the state will lose approximately $10.00 on each IOU mailed out.
“Add in mailing costs and the state will be losing even more money. The good news is 
that they are taking the process seriously and not just issuing the notices on scraps of paper. That is something some other states like Kansas are considering doing but California has quite rightly noted that by doing that they will be opening themselves for fraud,” said Scrape TV Business analyst Ken Green. “The real advantage of course is that they will have the best looking IOU’s in the nation. With so many states looking to follow in their footsteps they are setting a standard that most other states will simply not be able to follow. California has long been the economic engine that has driven the economy of the country and now they are setting the standard for debt. I’d imagine that we’ll see more than a few of these IOU’s on the black market or EBay in the very near future.”
The IOU’s will come on acid–free Bible paper which is made of 25% cotton is generally used in thick novels. They will come in three pages and will feature both a cover page and an index. The pure leather cover will be embossed with 24 karat gold with both the seal for the state of California and the recipient’s name. All IOU’s will be couriered to individual’s homes by certified couriers.
“Some people will argue that this kind of spending is exactly what has gotten the state into trouble in the first place but that would be dismissive of the efforts they are making. By investing in quality IOU’s now they are ensuring the long term success of other forms of debt delivery. They are affirming themselves as the leaders of the debt movement and will start to reap those rewards when other states come asking for help with their own IOU system,” continued Green. “Add to that the sheer collectability of the forms and you have perhaps the most elegant form of debt that has ever been created. Once again, California leads the way.”
The state will pay 3.75 percent on the IOU’s. The cost of production does not include the money being paid to workers which reportedly earn between $45 and $50 an hour.
William Ashford, Business Correspondent
NEWS > BUSINESS > CALIFORNIA IOU’S NOT WORTH THE PAPER THEY ARE PRINTED ON
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