Wednesday, July 08, 2009

I Would Gladly Give You an I.O.U. on Tuesday for a Hamburger Today

Those "registered warrants" being issued in California, aka I.O.U's, have been slow in coming for many... or yet to arrive.
“We are out of cash now,” said Carlos Flores, the executive director of the San Diego Regional Center, which provides services to Californians with developmental disabilities. The center is awaiting a $12 million warrant. “I can pay my staff next paycheck, and that’s it,” Mr. Flores said.

Other state contractors who provide services to the disabled had similar stories. Mark Berger, the chief executive of Partnerships With Industry, which offers job placement and training for the same type of clients, said he, too, had yet to get a warrant. “I haven’t heard of anybody who has received one,” Mr. Berger said.

There is also the possibility that if and when the warrants do arrive, the recipients might have to jump through hoops to turn them into cash.
The majority of banks have been clear that they will not take the warrants after July 10. Banks “do not wish to facilitate the lack of resolution of the budget deficit by basically providing this accommodation for an extended period of time,” said Rod Brown, chief executive of the California Bankers Association. “California must become more fiscally responsible.”

[...]

People expecting money from the state who do not get a warrant by Friday have three choices. They can try to find an alternative bank or credit union willing to deal with someone who is not a customer, they can hold the warrant until it matures and collect the interest, or they can try their luck in secondary markets, where some people are already seeking to buy i.o.u.’s at a discount.


What's interesting is that there are plenty of Californians who would gladly pay more taxes to help solve the deficit, under the right circumstances.


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