California goes broke, halts $3.5 billion in payments

This unreal situation will be played out in many states this year. There is no easy way out, expect services to be curtailed. Municipal bonds, a conservative investment in past years are now very risky.-Lou

California goes broke, halts $3.5 billion in payments

California, the eighth largest economy in the world, is broke. "People are going to be hurt starting today," said Hallye Jordan, speaking on behalf of the state Controller.

"There's no money."Since state legislators failed to meet an end of January deadline on an agreement to make up for California's $40 billion budget gap, residents won't be getting their state tax rebates, scholarships to Cal Grant college will go unpaid, vendors invoices will remain uncollected and county social services will cease.

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