Thirty Two States Borrow to Fund Unemployment Insurance

As I have posted, the present regime is incapable of taking fruitful steps to turn any of this around. In fact, besides preventing the banking system from simply collapsing and producing an outright depression, nothing is even been attempted yet.

The actual economy is still tracking the shape of the Great Depression.  A massive loss of employment is not been remedied.  This is mostly because industry itself and the economy remains weak and possibly lacking credit and credit takes a long time to build naturally.

Again, our best and perhaps only route that can be easily inspired by government action is the housing and mortgage industry through a direct reform of the mortgage laws and the decision to backstop the whole system through the banking system.

The politicians are all pretending the problem is going away.  That is an interesting experiment and it will be curious to see how it works out.  Recall that Japan has not yet properly recovered from the collapse of 1990 and it is twenty years later.

My most pressing concern is not the steady increase in unfunded government and private liabilities because the act of creating new cash offsets those problems.  It is the ten mill or so individuals who are presently lacking employment.  Their benefits are disappearing and they are not paying any taxes at all.  Thus tax revenues are shrinking still and no one is addressing it at all.

There are solutions, but unfortunately,  Barrack Obama looks to be the least able to grasp the options of anyone, just when a president’s leadership is needed.

32 States Have Borrowed from the Federal Government to Make Unemployment Payments; California Has Borrowed $7 Billion

FRIDAY, MAY 21, 2010

EconomicPolicyJournal.com has learned that 32 states have run out funds to make unemployment benefit payments and that the federal government has been supplying these states with funds so that they can make their  payments to the unemployed. In some cases, states have borrowed billions. As of May 20, the total balance outstanding by 32 states (and the Virgin Islands) is $37.8 billion.

The state of California has borrowed $6.9 billion. Michigan has borrowed $3.9 billion, Illinois $2.2 billion.

Below is the full list of the 32 states (and the Virgin Islands) that have borrowed from the federal government  to make unemployment payments, and the amounts that remain borrowed as of May 20 . (Numbers in red are billions)

Alabama      $ 283 million

Arkansas        330 million

California        6.9 billion

Colorado       253 million

Connecticut    498 million

Delaware         12 million

Florida           1.6 billion

Georgia         416 million

Idaho            202 million

Illinois            2.2 billion

Indiana           1.7 billion

Kansas           88 million

Kentucky     795 million

Maryland     133 million

Mass.          387 million

Michigan        3.9 billion

Minnesota    477 million

Missouri       722 million

Nevada        397 million

New Jersey   1.7 billion

New York     3.2 billion

N.C.              2.1 billion

Ohio             2.3 billion

Penn.            3.0 billion

R.I.              225 million

S.C.            886 million

S.D.              24 million

Tennessee     21 million

Texas           1.0 billion

Vermont        33 million

Virginia       346 million

Virgin Islands 13 million

Wisconsin     1.4 billion

Total         $37.8 billion

Posted by Robert Wenzel at 3:02 PM