California to Suspend 2008 Refund Payments

State Controller John Chiang announced today that Californians' tax refunds, welfare checks, and student grants are SUSPENDED starting February 1. This is an attempt to solve the 'cash crisis' which is essentially a giant deficit in the budget otherwise known as a catastrophic legislative failure. Lucky for taxpayers, at least the state already spent the time to design IOU's for us.

Will this really help? Let's break it down.
The budget has a deficit of $42 billion dollars.
Tax refunds make up approximately $2 billion dollars.
Total payments frozen equal $3.7 billion dollars.

So no, this does not really help. It fixes the problem for approximately one month. It gets better. The government has known about this problem for years. This last ditch stop gap effort is a band-aid on a shot gun wound that is hemorrhaging cash. Our cash.

Hasn't California always run a deficit? Why didn't this happen to Gray Davis in 2002 when California ran a $30 billion dollar deficit?

Well, in the past the California legislature simply borrowed more money. Now California has the worst credit in the entire country. Combine that with the fact that banks just aren't lending to deadbeats like they used to and we get what is known in the financial world as a clusterf*ck of cosmic proportions.

So enjoy the 'temporary refund adjustment' alla the Simpsons. And enjoy the tax hike that is soon to follow. I'll fill folks in on how to combat this when I'm not flabbergasted.