This Is a Bad Sign For Our System - the Irreversible Debt Spiral

Hawaii, North Carolina and apparently soon New York will be delaying the disbursement of State tax refunds.  Here's the article from Zerohedge.com:  LINK.

It's a really bad sign when a debtor goes delinquent on money owed.  In this case, technically the State is indebted to the Taxpayer and it looks like the Taxpayer will now have to stand in line to get paid.  When a business or individual starts delaying payement of their bills, it's usually the first sign of financial stress leading to bankruptcy.  To be sure, there is always the possibility that a wounded debtor may recover and eventually catch up on bills and debt repayment. But in the case of most States AND the Federal Government, spending budgets keep ballooning while tax revenues keep dropping - not the signal of recovery.  In the junk bond business we called bonds issued by companies in this situation "IDS" bonds:  Irreversible Debt Spiral bonds.

It's bad enough that the Government gets to use the float on taxes withheld from paychecks until tax returns are filed and processed. But to be quite frank, I'm not sure what the difference would be at this point between what these States are doing and a check kiting or Ponzi scheme.  Anyone who sees news like this and still believes that Greece/Spain/Europe is in worse shape than the U.S. needs to either lay off the Prozac or stop doing bong hits.