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July 2, 2009 (LPAC)--As of 2 PM PDT this afternoon, the printing presses in Sacramento will begin to produce “registered warrants,” also known as IOUs, as the state of California progresses further into an advanced stage of disintegration. Controller John Chiang announced that the initial run will be 28,742 IOUs totaling $53.3 million, and will go primarily, in the first round, to residents waiting for their income tax refunds. The next round of IOUs will go to local governments, and vendors and contractors to the state. So far, the Bank of America has agreed to honor the IOUs, at least until July 10. Gov. Schwarzenegger and other state officials will be making calls to other banks, asking them to honor the IOUs.

One senior Democratic Party observer pointed out that the Governor is playing a game of “budgetary chicken,” and has made it clear he will not veer away at the last second. This show of “nerves” is supplemented by taunting Democratic leaders, for their refusal to go along with his cuts, accusing them of “catering to special interests.” This source said that it is criminal for the Governor to reject pleas to protect the most vulnerable sectors of society as knuckling under to “special interests,” as top state health officials have warned that deaths will result from the cuts proposed. He added that, while the Democratic leaders continue to demand some increased taxes, to stave off the most devastating cuts, there are no plans, at present, to renew an appeal to the Obama administration, as it has been made clear to them that they can expect sympathy, but no help from the federal government.