Over the weekend, we covered the threat of California's crazy budget tricks to inflation.
Turns out, the IOU's appear to violate the Constitution. They may also qualify as securities subject to SEC regulations.
Basically, the whole thing is a big mess and would have been a lot simpler if California had simply controlled its spending in the first place.
I feel like I should have caught this myself. But I have to admit that I've spent a lot more time studying the Bill of Rights than Article I, especially Section 10. Then again, I knew that states are prohibited from laying duties on imports, yet Massachusetts still tries to impose its sales tax on good coming from other states, and the Federal government hasn't put a stop to that.
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