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

Discussion in 'Economics' started by peilthetraveler, Jul 1, 2009.

  1. 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.
  2. 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;
  3. TGregg


    Wow. That could be interesting if somebody raises this issue. Perhaps the IOUs are unconstitutional.
  4. 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. "
  5. Yep.
    And when you require 2/3 rd's majority in order to pass a budget, this is what can unfortunately happen.
  6. IMF


    LOL and FED issuing dollar is constitutional ?????????????

    you poor hapless blobs :mad: