Unemployment in California just went over 10%. Tax revenues have collapsed, bringing Arnold Schwarzenegger’s state government to the brink of bankruptcy. Out of cash, the state was forced to pay its employees in IOUs.
What do you think the US Dollar is? Nothing but an IOU, except it isn't redeamable for anything anymore since it was taken off the gold standard.
Arnold is going to get arrested by the IRS for making their own IOU fiat currency to compete with the US Dollar. They don't like competition to their monopoly of worthless paper, and they think they should be the only ones allowed to print counterfeit money out of thin air.