This article deals with the welfare of the unemployed people during this recession. Jobless benefits funds have been drained in majority of states. These states have 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.
Debt-challenged California has borrowed the most, totaling more than $8.4 billion, followed by Michigan and New York, which have loans worth more than $3 billion. Nine other states have borrowed at least $1 billion from the federal government.
"The nation's financing system for jobless benefits is under unprecedented stress," said Andrew Stettner, deputy director of the New York-based advocacy group for the unemployed. "While the recession has certainly made things worse, this funding crisis has been developing for years."
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.
Financing experts suggest that states build up their jobless benefit coffers during strong economic times so that they can draw from them during downturns.
This article puts in perspective of the true trouble California is in. As a state alone it basically needs a bailout, having 8.4 billion dollars in debt, that state is bankrupt. Michigan and New York's debt combined do not equal the debt of California. This must be turned around quickly or California is headed for a long, strenuous future with big debt.
ReplyDeleteIt is scary to see so many states in trouble. States will continue to cut programs and a variety of other things.
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