California's IOU to the world

In recent months, a number of reports by risk-analysts, insurers and intelligence agencies have highlighted the possibility of political instability following in the wake of the global economic turmoil. Most of the potential trouble spots have been identified as being in poorer parts of the world. Last week, Lloyds, for example, highlighted the risk of instability in Latin America. Over the past few weeks, however, tremendous political chaos has emerged in some of the most affluent parts of the globe. In the UK, the government is teetering on the edge of collapse and a tsunami of somewhat inchoate rage at the shenanigans of politicians of all stripes is rolling in on parliament. In Italy, Silvio Berlusconi's peccadilloes are adding fuel to the fires of discontent. And in California, America's wealthiest and most populous state, an extraordinary political stalemate around how to deal with a yawning budget deficit risks essentially catapulting the state into insolvency, devastating social programmes and education alike, and igniting massive popular anger. As of today, California has started issuing billions of dollars in IOUs to its creditors.

Continue ... http://www.guardian.co.uk/commentisfree/cifamerica/2009/jul/02/california-budget-crisis-economy