Professor Elam

The state of California is running out of cash, quickly.  How bad is it?  click to read that the state is planning to mail creditors IOUs as soon as Feb 1 instead of cash. Expecting a tax refund, sorry. Money from the state for performing medical services, hope. This happened in various cities during the Depression. A lady once told me of being paid in script by the City of Chicago in the 1930s.  Retailers soon accepted the script as actual money so life went on. It will be interesting to see if Californians have that faith in their future, ie, will the script IOU become accepted as money. After all we have a fiat money system at the federal level, it is only money because the government says so, there is nothing backing it up. So is there really any difference in California script and a federal reserve note.