These banks have probably had their fill with "toxic assets." They were pressured into making these investments by the Federal Government and were later chastised by members of congress for doing so. Strangely enought these were the same members of congress who pressed the financial institutions to make the subprime loans. I guess the banks do not wish to be burned a second time by irresponsible politicians.

It is a bad time to be a California State Employee, or other wise linked to the Government. IOU's just do not work. You either have to cut the services and the jobs. Raise Taxes or Both.

As a Foster Parent I would try to hang on as long as possible, at least we all would eat. I never intended the Family Budget to include any of the Foster Care Money, but over the years it has.

The State Covers their Health Care, they get Free Breakfast and Lunch during the School Year, etc. etc. The problem would be with my stipend and the Bills I owe and services we supply,

I know Foster Parents who would have their kids bags packed in front of CPS the moment they even thought that they would not be paid.

I think most of us would weather the Storm. Some of the alternatives would be far worse. We can eat Rice and Beans if need be.

I will most likely not take in any more and when the two I have leave that would be it. I cannot afford to retire in Hawaii way to expensive.

I would Not live in California.

Needs to resolve their own problems, if they can get themselves into this mess, they can get themselves out of it. Bet folks wished Reagan were around!!!

Is the IOU a new form of currency? Or is it a negotiable instrument? This is an interesting problem, unless you receive the IOU and then it is problematic.

like Dave said, the banks got in trouble for making bad loans (having bad assets on their books). Since we, the taxpayers, now own stock in those banks, I don't want them accepting more bad assets in the form of CA IOUs. California needs to get away from being a cradle to grave welfare state, cut spending, and fix their own mess.

You just think you own shares in those banks, I don't have any stock certificates, do you?

to re: lost in DC 8:52 "we" own public lands don't we? do you need a deed of trust to evidence that? are you saying the gov't did not buy preferred stock in the banks?

I think you're missing the point. The point is, it is bad public policy to force banks to accept bad assets as good. CA IOUs are bad assets.

What guarantee is there that the note would be good on the redemption date? California has created its own mess. Too many government regulations and too much public assistance. California is only a sign of what is to come if our federal government continues down the same path.

I don't blame these banks.

California has become dysfunctional because of a obstructionist conservative minority.

We don't have a democracy where each vote is equally valued. It takes a 2/3 vote to pass our budget. Conservative obstructionist's votes are worth double the value of responsible Californians who want a solution. This voting welfare system shelters conservatives from having to sell their ideas in a free market of ideas. California has a budgetary affirmative action program for conservatives.

We had a 6 billion shortfall when Davis was governor. Davis had a plan. Conservative am radio incited their ignorant listeners to recall Davis. This recall required spending $52,000,000 California didn't have increasing our debt. Their solution was electing Arnold.

The interest on these IOU's is another $42,000,000 in added debt. What is the solution this minority had?

They want to spend another $52,000,000 to recall Arnold.

Californians created this mess by giving this conservative majority an undemocratic advantage.

The moral of this story, is conservatives have no real solutions. They are a party with no ideas and don't care now their actions hurt others.