California is Nearly Bankrupt — And They’re Printing Money!

How does an effectively bankrupt state pay the bills? By printing its own currency! California is issuing IOUs instead of paying bills in cash. In other words, instead of borrowing from people who want to lend money, and using that money to pay its bills, the state is borrowing from people who it already owes money to, and promising to pay the bills a little later (with a little interest).
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One of the keys to’s remarkable growth has been their “affiliate” program. They allow anyone to link to Amazon products and get a cut of every purchase. It’s a great program for Amazon, because it gives them a sales force with hundreds of thousands of members, none of whom need a salary. And it’s good for customers, too, since it gives people an incentive to write about the products they like, that others might like, too. In fact, some bloggers have been able to make a decent income off of Amazon affiliate payments. But all is not well for Amazon or Amazon’s affiliates.
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New Jersey Cleverly Increases Back Taxes by 1000%

New Jersey made headlines today after the state collected as much as $600 million from a tax amnesty. It looks like great news: the state is collecting extra money during a recession, and late tax filers are able to pay back the money they owe without getting bitten by high interest and fees.

The problem is the behavior this engenders. A quick look at their previous tax amnesties reveals the effect this kind of program has on New Jersey taxpayers:
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