Whats the difference between California IOUs and issuing paper money by the state?

peilthetraveler

peilthetraveler

I mean this is pretty much the same thing right? California Issuing its own paper...doesnt matter much if its called an IOU or a California dollar. Its still worth the same thing. Nothing.
 
Quote from peilthetraveler:

I mean this is pretty much the same thing right? California Issuing its own paper...doesnt matter much if its called an IOU or a California dollar. Its still worth the same thing. Nothing.
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Interesting, it's forbidden by Article I of the Constitution:
Section 10, Clause 1 (Contracts Clause): No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;
 
Quote from RobtF:

Interesting, it's forbidden by Article I of the Constitution:
Section 10, Clause 1 (Contracts Clause): No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;
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Wow. That could be interesting if somebody raises this issue. Perhaps the IOUs are unconstitutional.
 
They've done it before.

"California last issued the IOUs in 1992 when lawmakers and then-Governor Pete Wilson deadlocked on a budget for 61 days past the start of the fiscal year. "
 
Quote from pspr:

They've done it before.

"California last issued the IOUs in 1992 when lawmakers and then-Governor Pete Wilson deadlocked on a budget for 61 days past the start of the fiscal year. "
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Yep.
And when you require 2/3 rd's majority in order to pass a budget, this is what can unfortunately happen.
 
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