Tuesday, January 26, 2010

Unemployment Insurance Funds In Crisis


Propublica says that
The unemployment insurance system is in crisis. A record 20 million Americans collected unemployment benefits last year, and so far 25 states have run out of funds and been forced to borrow from the federal government, raise taxes or cut benefits. Using near real-time data on states' revenues and the benefits they pay out, we've estimated how long their trust funds will hold up.
The article states that 25 states have unemployment funds that are already in the red and that 9 more states will be in the same situation within 6 months. Paying out unemployment is largely the responsibility of the states. It was reported, even as far back as last summer, that only a handful of states had enough money in reserve to weather a great depression scenario. It had been forecasted that states would end up borrowing money when their unemployment reserves were tapped dry.
Half a year later, the direst predictions seem to be coming true: So far 25 states have borrowed more than $25 billion to keep benefits flowing after their trust funds ran dry. In many other states the situation is deteriorating fast.....According to our projections, Arizona, Colorado, Hawaii, Kansas, Maryland, Massachussetts, New Hampshire, Tennessee and Vermont will find themselves in the red within six months.

Look at Propublica's unemployment tracker.

Here is how CT stacks up: Connecticut's unemployment fund is currently bankrupt and Connecticut is borrowing from the federal government.

And while states’ poor fiscal planning is a serious topic on its own, our tracker also follows the increasing human toll: so far businesses in 36 states face tax increases this year, ranging from a few dollars per worker to more than a thousand. Six states have moved to cut, freeze or otherwise restrict benefits, a number that is likely to increase.

Some states have focused the pain, like Virginia, where unemployed seniors who also receive Social Security face steep benefit cuts. Other states, like Pennsylvania, have taken a broader approach: all unemployment beneficiaries will receive 2.4 percent smaller checks starting this month.

Today it was announced that Sam's Club is cutting 10,000 jobs.

More ginormous real estate projects are defaulting.

There is much more to come with this "recession"....

What we have seen already is just the prelude to the real opera.

So while our elected Nero's in Washington have been fiddling with pork laden special interest payback deals they called "stimulus", that have been wholly ineffective in solving the real problems we faced, we will have now have massive debt heading into this economic tsunami. They chose to waste time with a budget busting healthcare package instead of working to solve the economic issues before them.

We truly need to throw them all out in November.
Until then, try to do whatever you can to preserve your assets.
Save something.
Buy gold or silver.
Stock your pantry.

You won't be able to rely on government - It is BROKE.

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