Extending Unemployment Benefits Leave States With UI Defecits


Once again proof socialism does not work because sooner or later you run out of other peoples money to redistribute. The best way to fight Unemployment is to allow people to go to work not pay them to stay home. And of course making a fertile environment for job creation leads to more employment which means less people unemployed. The federal government has never created one private sector job, all they can do is hinder their creation by continually taking money out of the private sector to support public sector largesse.
clipped from www.american.com

As of this summer, unemployment insurance trust funds in 30 states were insolvent.

The Department of Labor expects that as many as 40 states will require federal loans for unemployment insurance in fiscal 2013, with borrowing totaling $93 billion.

Extended unemployment insurance benefits since July 2008 has exceeded $131 billion, and the net federal spending in this area far exceeds the Greek bailout.

New jobs would have provided indirect but immediate assistance to states’ unemployment insurance trust funds by reducing the number of unemployment claims and raising additional revenue with each new worker.

High unemployment claims drain trust funds, but rising numbers of the unemployed also decrease the number of workers for whom employers are paying into the funds. State collections in 2009 were 13 percent lower than pre-recession levels. This decline in collections combined with the heavy influx of unemployment claims completely emptied many states’ reserves.

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