One aspect of the current economic collapse that has not been widely reported is the extreme difficulty that most state unemployment insurance funds are facing. At this point, 25 state unemployment insurance funds have gone broke and the Department of Labor estimates that 15 more state unemployment funds will likely go broke within two years and need massive loans from the federal government just to keep going.
So how bad are things out there?
Indiana state Representative David Niezgodski was recently very blunt about the status of Indiana's unemployment program....
"Our system was absolutely broke."
State unemployment funds are generally separate from the general budgets of most states. When these funds do go broke, usually there are two solutions that are considered. Either unemployment benefits are cut or payroll taxes are increased.
But now many states have resorted to borrowing billions upon billions of dollars from the federal government to keep their programs going. In fact, states have borrowed a total of 24 billion dollars from the federal government up to this point.
But there is a huge problem.
Unemployment is not going away any time soon.
For decades, U.S. corporations have been allowed to ship good jobs overseas and now everyone is looking around and wondering where all the jobs went.
The truth is that they are gone, and as the U.S. economy continues to collapse things are going to get even worse.
For example, the mayor of Detroit recently said that the real unemployment rate in his city is around 50 percent.
Are you starting to get the picture?
Meanwhile, the U.S. federal government raised the debt ceiling to 12.5 trillion dollars just before they left for Christmas, and there are reports that they will soon be raising it to 14 trillion.
Peter Schiff discusses this latest action by Congress and also addresses the fact that the U.S. federal government is now guaranteeing all losses by Fannie Mae and Freddie Mac in his latest video....
[...] All of this unemployment is putting severe stress on state unemployment funds. At this point, 25 state unemployment insurance funds have gone broke and the Department of Labor estimates that 15 more state unemployment funds will likely go broke [...]
state unemployment taxes were systematically cut over the past twenty years.
therefore, they were underfunded to meet a crisis.
we are reaping the benefits of tax cuts right now……..
[...] All of this unemployment is putting severe stress on state unemployment funds. At this point, 25 state unemployment insurance funds have gone broke and the Department of Labor estimates that 15 more state unemployment funds will likely go broke [...]
[...] All of this unemployment is putting severe stress on state unemployment funds. At this point, 25 state unemployment insurance funds have gone broke and the Department of Labor estimates that 15 more state unemployment funds will likely go broke [...]
Your article was extremely well put together. We are very interested in the names of the states with bankrupt unemployment funds, but are unable to acccess that information. Any suggestions?
If you think unemployment is putting severe stress on the govts, wait and see what stress they put on them when their benefits run out. Half will turn to crime… then you’ll have stress.
oh goodie…now the states can raise taxes on those citizens that are working…..the GOVT EMPLOYEES……HA…HA….the laughs on them….
[...] 25 state unemployment insurance funds are already broke and 15 more states are on track to go bust w…. States are now borrowing tens of billions from the federal government, which also is guaranteeing all losses incurred by the “job shop for unemployed Democrats” called Fannie Mae and Freddie Mac. [...]
I tell you what, after over 30 years in construction, this is the first time I have been off work for more than 5 months. It’s going to be at least a year before I’m dispatched. If my first job doesn’t last for 6 months, I’m screwed since unemployment requires that much time to figure a benefit amount… I know I’m not alone… I gotta wonder if the government figured that out yet?!?
Try looking for work after you turn 50! I just got laid off again after working 5 months. I am not eligible for unemployment because I was laid off most of last year. Obama says unemployment claims are down but the truth is people are still unemployed but ran out of benefits. They need to use the stimulus money they already took and fund the unemployment claims instead of lining the pockets of the crooks who started this mess in the banking industry. Let Fannie and Freddie fail
not the citizens/ tax payers who will be paying back all that stimulus money they stoled.