June 29, 2010

WHERE'S GENERAL PINOCHET WHEN YOU NEED HIM?:

The Unemployment Insurance Crisis (Alex Brill, June 29, 2010, The American)

With an unemployment rate near 10 percent, the media has focused on Congress’s inability to renew extended unemployment benefits. This recently expired federal law gave unemployed workers up to 73 weeks of federally funded benefits beyond the typical 26 weeks provided by states. As a consequence of the extenders bill stalling in the Senate, more than 1.25 million unemployed workers have stopped receiving benefits.

But this legislative gridlock is not the only problem facing the unemployment benefits system. An overlooked fiscal crisis looms: the depletion of the trust funds out of which states pay unemployment benefits. As of June 24, unemployment insurance (UI) trust funds in 30 states and the Virgin Islands were insolvent, requiring loans from the federal government totaling over $38 billion. The Department of Labor expects that as many as 40 states will require federal loans in fiscal 2013, with borrowing totaling $93 billion. This amount is above and beyond the $130 billion in additional federal spending on unemployment benefits in the current economic cycle.


Thus the need for personal unemployment accounts.

Posted by Orrin Judd at June 29, 2010 5:50 AM
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