Not Legal Tender

Obviously paying people with a bunch of IOUs they can't actually spend is going to hasten the economy's demise. But, hey, Arnie's in charge!

The bad news is that next in line to get IOUs instead of cash would be Californians awaiting state income tax refunds and companies that do business with the state. In a letter to state agencies, Chiang said his office was projecting the state would run out of cash around the beginning of March. Without a deficit-closing deal between legislators and Gov. Arnold Schwarzenegger, Chiang said, his office "has no choice but to pursue the deferral of potentially billions of dollars in payments and/or the issuance of individual registered warrants, commonly referred to as IOUs."