Pay Your Taxes With an IOU!

FN: Can California residents pay their taxes with IOUs now? I mean, it would only be fair right? The same arguments apply. Expenses exceed revenues for the individual consumer, just like the state. So why can the state pay its bills with IOUs but individuals can't pay the state with IOUs?

Oh wait. Isn't fiat currency (like the DOLLAR) just one big fat IOU? Hehe.

How can this end well? How? (The last paragraph is epic.)

State rolls out $3.36 billion in IOUs today: "California plans to begin issuing billions of dollars in IOUs today to scores of creditors, including private businesses and county governments.

The move will not affect many individuals who receive government assistance. Low-income people, the elderly and the disabled will receive their regular checks on schedule. Schools, state workers, Medi-Cal providers, pension funds and In-Home Supportive Services are all protected by law from receiving an IOU in lieu of a real check.

But thousands of vendors who provide goods and services to the state will be given IOUs instead of cash. From a company that sells french fries for prisoners to a firm that pumps out latrines in state parks, many businesses are trying to save cash and hoping their banks will accept the IOUs.

Meanwhile, the University of California has not yet decided whether it will front the money for educational Cal Grants, another program that will get IOUs.

State Controller John Chiang expects to disburse $3.36 billion in IOUs and $10.9 billion in regular payments this month.

After officials decide this morning how much interest they'll pay on the IOUs and when they can be redeemed, the controller's printing presses will churn out the first batch of IOUs for 28,742 state tax refunds totaling $53.3 million, said Garin Casaleggio, a spokesman for the controller.

The IOUs probably won't be cashed by the state for 90 days - and then only if the treasury has the money to cover them."