That”s right, the state of California – which has one of the biggest economies in the world – has no money left to pay income tax refunds; so now it is planning to refund taxpayers with IOUs.
It is also asking state employees to go on two days unpaid leave every month.
California is now staring at a US$42 billion budget deficit. How did this happen? Oxbury Publishing provides an analysis here.
You gonna be back, Arnie? I think you have just terminated California (as a going concern). Oops.
Who is going to bail out California?
Obama has already announced a US$825 billion bailout plan. That’s in addition to Bush’s $700 billion bailout package. The big question now is where is all that money going to come from?
Fresh from his inauguration, Obama still thinks he has enough money to continue the US’ foreign military adventures.
But Paul Craig Roberts, a former Assistant Secretary of the Treasury in the Reagan administration, looks at the larger picture and says the United States is busted.
Now, who is going to bail out the United States?