The political wrangling continues in California while the Legislature fails to tackle its $24 billion deficit, all of their energy seems to be concentrated on circumventing the obvious choice of reducing spending. The voters sent a clear message to state officials with the ballot initiatives they struck down back in May. Their message was for no more tax increases or borrowing of money to continue their wasteful over the top spending. The voters seemed ready to take whatever medicine was needed to bring the lunacy to an end and instill some restraint in the budgetary process. That was about 6 weeks ago and there does not seem to be any progress made on that mandate and their fiscal year ended June 30th. Beginning in the month of July, if some concrete solutions are not presented then the state will be forced to issue IOUs from the treasury to cover expenditures.

IOUs are not a solution to this issue as they are just another way to avoid the difficult choices that must be made. Plus, IOUs are nothing more than a form of debt which is in violation of the will of the people that voted to end this practice going forward. How is it that state officials do not seem to understand that the voters want the spending reduced, no more searching for ways to keep financing unsustainable budgets with taxes or debt which should include the use of IOUs? It makes you wonder if these IOU issuances may prove to be a ploy in which the state never honors, they can be conveniently extended into the future to be dealt with at another time by someone else. This will make the state Government either disingenuous with the voters or dishonest with the recipients of the IOUs. There is really only one way out of this crises and it is to bring the expenditures in line with the revenue of the state. No amount of political deception, avoidance, or any other attempt of bypassing this reality is going work. Simply, IOUs are a form of debt in which voters clearly rejected, they should not be used and expenditures should be reduced instead.

This is something we should all watch carefully throughout the country because it is going to be the fate of our nation as well. Our Federal Government is travelling down the exact same road of irresponsibility as the state of California did, and our future will soon be bringing us a dreadful message as well. They say as California goes, so goes the country. The only difference is California can not print its own money and the day may come that we are going to wish the same of our Federal Government as well.