It should be alarming to everyone that, according to a new report, California’s Hidden Deficit: Unemployment Insurance Fund Owes $2.6 Billion, released jointly by ProPublica and the California Report, that state government is going into massive, multi-billion dollar debt to (to the tune of $30 million more each day) in order to pay out what appear to be unsustainable benefits ($$) to those who have lost their jobs. You can read the report here, and listen to it here.
According to ProPublica…
Seventeen states have been forced to borrow federal money because their unemployment insurance trust funds have run dry — but even among this group one state stands out from the rest.
California, which now owes $2.6 billion, has the most indebted trust fund in the nation. For the last month, the state has been borrowing at a rate of about $30 million per day.
What does this mean? Well I guess state policy makers need to make a choice — trim the benefits to a sustainable amount, reprioritize state spending to pay these benefits, or raise taxes to pay the benefit. I don’t need to remind anyone that the last option is truly a folly — as raising taxes will harm the economy sending more people out of work,and more unemployed Californians seeking more benefits…