State Of Suspense

Sacramento tries a Depression-era gimmick: IOUs to pay its bills

As if drought, earthquakes, fire and floods weren't enough, there was the recession and the riots and, now, for the first time since the Great Depression, no more money. The beleaguered state of California has run out of cash and is paying its bills with IOUS.

The controller's office in Sacramento sent out the first 12,000 of the IOUs, euphemistically labeled registered warrants, after the Democratic-led state assembly failed to reach agreement with Republican Governor Pete Wilson on how to erase a $10.7 billion shortfall in the latest state budget. Most of the IOUS were for income tax refunds, but within...

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