Tuesday, November 9, 2010

Nearly All State Unemployment Funds in Deficit

Deficits such as these are not limited to California. Illinois, Wisconsin, Texas, New York, New Jersey, and/or nearly ever State in the Union have drained their unemployment insurance funds and must start paying the federal government interest on the borrowed money in 2011. The markets already know that there's no way the States will not have the funds to service and repay the debt without massive cutbacks.

Listen; if you want to still your head in the sand on this one, it's up to you. The States have a SERIOUS cash flow problem that will inevitably be "solved" by the Federal printing press.

Headline: California's unemployment fund has $10.3 billion deficit

California businesses already pay some of the highest unemployment taxes in the country – and the tab is likely to increase.

The recession and the Legislature's decision years ago to raise benefits have drained the state unemployment insurance fund, which now has a estimated $10.3 billion deficit.

Headline: Illinois to start paying interest on jobless benefits

The $2.2 billion Illinois has borrowed from the federal government to pay for unemployment benefits is about to get hit with a hefty fee.

As of Jan. 1, the federal government will start charging interest to the 32 states or territories that have borrowed money to bolster their unemployment insurance funds and still owe on their debt. Collectively, nearly $41 billion is owed, according to Department of Labor data.

Headline: Texas may sell $2 bln of debt for unemployment fund

Texas might refill its unemployment trust fund by selling $2 billion of debt later this year, a strategy that cut its borrowing costs in the last downturn, according to a state official.

Texas, like many states around the nation, has seen the recession drain its unemployment insurance fund, which pays benefits to jobless workers

Source: sacbee.com
Source: rrstar.com
Source: reuters.com
Thanks Bob

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