A group of the biggest U.S. banks said they would stop accepting California's IOUs on Friday, adding pressure on the state to close its $26.3 billion annual budget gap.
The group of banks included Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and J.P. Morgan Chase & Co., among others. The banks had previously committed to accepting state IOUs as payment. California plans to issue more than $3 billion of IOUs in July. (Emphasis added.)
Of course, if you or I were to send the government an IOU in lieu of taxes, we'd have out assets seized and/or get tossed in jail.
With Federal tax receipts dropping and investors starting to look askance at buying Treasury Bonds, how long until the Feds start issuing IOUs?