South Carolina and other cash-strapped states borrowed a total of about $31 billion from the federal government over the last two years to provide their unemployed workers with benefit checks, and now as the country climbs out of recession the states must find a way to pay it back.
"First, even discussing this possibility of federal debt forgiveness is yet another indication of the severity of the problem we've talked about for a year and a half now -- a mismanaged agency in the ESC that lacks real accountability, that has run up a near billion-dollar deficit in the Unemployment Trust Fund," Fox said.
States, like Greece, are in trouble. Unlike Greece, that states have access to the printing press. Whether they can pay them back is questionable. As the article states towards the bottom, "there's no free money, not in government." There is no free money anywhere. If the perception that free money exists through debt forgiveness or other government programs, the market will take notice and exploit confidence. This means the dark pools of money will attack for profit, as they are doing in Europe right now.
Source: postandcourier.com
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