There is a grim irony that, just as the US celebrates its declaration of independence from unfair taxation imposed by an unaccountable authority, the fiscal shambles in California, one of its biggest states, is forcing its citizens to accept public IOUs in place of cash.

The Golden State is by no means the only one whose finances are in a mess. Many states have strict balanced-budget rules that act as automatic destabilisers, worsening economic downturns by forcing cuts in public spending as incomes and tax receipts fall. Swingeing cuts are being forced on recalcitrant governors and state legislatures, both Democrats and Republicans, from coast to coast.