Unemployment Insurance – Another Good Crisis

Despite the lies predicated by the Obama administration regarding an improving economy, many experts are growing increasingly concerned that we may be headed for another recession.

Brent Smith

Because of this, states may suffer mightily being that several already are carrying massive deficits in their unemployment insurance funds. “A mere 18 states have enough money in their unemployment insurance trust funds to get through a 12 month recession, according to the Department of Labor.”

The state trust funds are designed to provide 26 weeks of unemployment insurance to residents. “Strikingly, many of those state funds are actually in worse financial shape now than they were before the 2008 financial crisis.”

Not surprisingly California is in the worst shape. The state’s unemployment trust fund is presently indebted to the federal government for more than $6 billion. Yes, the federal government provides emergency loans to states that can’t cover the cost of their own unemployment insurance. It’s a huge disadvantage to states who aren’t allowed to print their own money – a problem the feds don’t have.

The Fiscal Times laments this policy. No, not of the Fed printing money it doesn’t have, or the states borrowing funds they can’t pay back. They miss the good old days where states “raise taxes in good times to finance unemployment payments in bad times, to counteract the effects of widespread joblessness.”

They’re upset that states are increasingly unwilling to raise taxes any further, because increasing taxes and throwing government money at a problem has always worked in the past.

One expert thinks it’s high time we scrap the entire state run unemployment insurance system in favor of a federal one. Wayne Vroman is an expert on unemployment insurance at the Urban Institute, a conservative think tank. Ha! Just kidding. The Urban Institute is as conservative as I am a gold toothed dreadlocked rapper.

Vroman said, “It’s increasingly obvious that in a state-level system, a lot of these states do not step up to the plate.”

By sheer coincidence, in Obama’s latest budget proposal, King Barack has “proposed shifting power away from the states and toward the federal government. He also wants to require states to offer at least 26 weeks of unemployment benefits, among other changes.” I don’t know how often it needs to be said, but it applies perfectly every time: Never Let a Good Crisis Go to Waste! And here we go again.

Of course, no one ever questions the constitutionality of federal involvement in state run unemployment insurance – just that there is a need for the Fed to fix the problems of the state – and progressive need out ways the Constitution every time.

I no longer blame the federal government for growing out of control and usurping more and more of the states constitutionally mandated authority. It’s just what they do. The founders knew it and we should to.

No, I blame the states for continuing, decades on, to take federal money every time it is offered, as if there are no strings attached.

The federal government, through land confiscation, regulation, mandates and loan-sharking are turning our once sovereign states into no more than provinces or oversized counties.

Governors and state legislators need to begin to just say no to the federal government. No, we won’t take your money and no, we won’t play by your unconstitutional dictatorial rules any longer.

The states will suffer in the short term, like the pain of drug withdrawal, but long-term, we will have a much healthier and more prosperous nation.

Also see,

From The Rooney Rule to the Looney Rule

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