Saturday, February 06, 2010

Unemployment Fund Insolvency

AW has warned you before, via Mark Martin's Off the Marble, about the indebtedness of our state unemployment fund. Is it good news or bad news that Arkansas is not the only state that has let things get this far out of hand?

Zero Hedge reports that "At this point there is no question that the vast majority of the hardest hit states now subsist exclusively due to the generosity of the Federal Government." They have borrowed many billions from the Federal government to pay out unemployment benefits.

I also like the colorful turn of phrase that the author uses to describe the situation when the Treasury can no longer find foreign buyers to finance this bailout of the states; "look for states to gradually reign in unemployment checks whether they like it or not, which would likely lead to some very interesting demonstrations of the broader population's lack of solidarity with Mr. Blankfein's $100 million, or whatever it may end up being, bonus number."

The intent of our state constitution is that our government should not be able to put us in debt without a vote of the people. So how did we wind up borrowing hundreds of millions of dollars from the Federal government without a vote of the people to do so?


Anonymous Anonymous said...

Mark's is Off the Marble.

6:44 PM, February 07, 2010  

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