OldNavySailor

Time for California Muni Bond Investors to Take a Stand

The fact that California is issuing IOU's as a substitute for payment for contracted services is a violation of Article 1, section 10, clause 1 ("Contracts Clause") of the United States Constitution; to wit:

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

These IOU's are nothing more than Bills of Credit, which is prohibited by the Constitution. They can make gold or silver coins as a tender of payment, but not an IOU (see Craig v. Missouri, 29 U.S. - supreme.justia.com/us/.../)