California Bailed Out by JP Morgan

JP Morgan bank bails out California with a loan to pay off its IOUs. But the bank, itself, was bailed out by Congress. If this loan goes sour, taxpayers again will be forced to cover the loss. There is no free market left in banking. It’s a command economy by government decree with all losses paid by taxpayers.

Snipped from the article at The Business Insider:

“California had been covering its budget shortfalls by issuing IOUs to pay for services, making it the first state to issue its own fiat currency since the Civil War. The program ran into trouble when banks announced they wouldn’t keep cashing the IOUs.

Eventually California reached a budget deal and kicked the can down the road, but there’s still the issue of the outstanding IOUs.

Yesterday JP Morgan agreed to lend California $1.5 billion to fund the program to redeem the IOUs. State controller John Chiang has announced the redemptions will begin on September 4th.”