Monday, April 12, 2010

33 States Have No More Money To Fund Unemployment

From CNN Money:

With unemployment still at a severe high, a majority of states have drained their jobless benefit funds, forcing them to borrow billions from the federal government to help out-of-work Americans.

A total of 33 states and the Virgin Islands have depleted their funds and borrowed more than $38.7 billion to provide a safety net, according to a report released Thursday by the National Employment Law Project. Four others are at the brink of insolvency ...

At the onset of the recession, only 19 states met the recommended funding level, which is one year of reserves equal to the highest amount of unemployment insurance paid out during prior recessions.

Interesting to note is that 9 out of the top 10 States that have borrowed the most money from the Feds are states that were carried by Obama and the Democrats in the last election! There are only 11 Republican controlled states which are on the list of 33, and only 1 is in the top 10. This may lead one to conclude that the Liberal policies regarding higher taxation and support (or lack thereof) for business creates the massive unemployment in these states, and the inability to support all those on the unemployment rolls stem from possible fund mis-management.

What is really scary is that not everyone who is unemployed is collecting unemployment. The unemployment numbers are MUCH MUCH bigger than what is being reported.

The reality is that our federal government is broke with zero reserves. We are $13 trillion dollars in debt! With States coming to the Feds hat in hand, it looks like the Feds will be up to even more borrowing or monetizing debt, leading the way to hyperinflation.