California to feds: Dude, where's our bailout?

Things are about to get a lot hotter in California. In response to political deadlock over its $42 billion deficit, State Controller John Chiang announced today that he would suspend some $3.7 billion in payments, including tax refunds, starting Feb. 1.

"Let me make this point," Chiang told reporters at a press conference in Sacramento, the state capital. "Delaying these payments will hurt real people, many of whom are barely hanging on in these tight times.

The payments include $2 billion in tax refunds owed taxpayers, vendor payments, welfare checks and student grants. If it comes to this, the state will issue IOUs instead of checks.

Great. Wonder if landlords or the grocery store takes IOUs?