Last week, more than a half a million American citizens filed for first time unemployment benefits, a level not seen since 1982. As a result, many states are facing unemployment insolvency.
Due to several factors, including states which opted to reduced the taxes corporations pay into unemployment, many states in jeopardy of running out of state funds to meet the need of their unemployed citizens. These states can borrow money from the Federal government, at interest (if not paid within a single fiscal year), but that does little to assist these states should unemployment continue its’ downward spiral. States are now looking to raise taxes or cut benefits – and in some cases, both.
Thirty states are at risk of having the funds that pay out unemployment benefits become insolvent over the next few months, according to the National Association of State Workforce Agencies. Funds in two states, Indiana and Michigan, have already dried up, and both states are borrowing from the federal government to make payments to the unemployed.
Indiana’s unemployment trust fund went insolvent last month, and has borrowed twice from Washington since then — the first such loans to the state since 1983. It also expects to request an additional $330 million early next year.
Michigan, which has been borrowing money from the federal government for the past few years to replenish its fund, is now $508.8 million in the hole and unable to repay it. Next month the state, where the unemployment rate is more than 9 percent, will begin levying a special “solvency tax” against some employers to replenish its trust fund.
California, New York, Ohio, Rhode Island and other states are inching toward insolvency as well, and may have to borrow from the federal government to get through at least the first quarter of 2009.
In South Carolina, officials recently requested a $15 million line of credit.
Other states (not mentioned above) which are at risk:
Alabama, Arkansas, Colorado, Idaho, Illinois, Kentucky, Massachusetts, Minnesota, Missouri, North Carolina, Pennsylvania, South Dakota, Tennessee, Texas, West Virginia, Wisconsin
Is it so hard for some people, people who are the have’s and have more’s to understand that a capitalistic society requires people have jobs which pay not just enough to get by on, but to have disposable income to shop? Shopping makes jobs, jobs sustain our economy. And the umbrella above jobs is that of manufacturing. If we do not manufacture stuff, we do not sell stuff. And if we do not make and sell stuff, what is it we are supposed to do, as a whole, to sustain the hundreds of millions of people in the US who desire work?
Thom Hartmann was on Countdown several nights ago talking about how the latest attempt to bailout General Motors and Chrysler were nothing but an attempt to bust the unions. During this discussion, he referenced Alexander Hamilton’s Report on Manufactures from December 5, 1791:
This is not among the least valuable of the means, by which manufacturing institutions contribute to augment the general stock of industry and production. In places where those institutions prevail, besides the persons regularly engaged in them, they afford occasional and extra employment to industrious individuals and families, who are willing to devote the leisure resulting from the intermissions of their ordinary pursuits to collateral labours, as a resource of multiplying their acquisitions or [their] enjoyments. The husbandman himself experiences a new source of profit and support from the encreased industry of his wife and daughters; invited and stimulated by the demands of the neighboring manufactories.
Besides this advantage of occasional employment to classes having different occupations, there is another of a nature allied to it [and] of a similar tendency. This is–the employment of persons who would otherwise be idle (and in many cases a burthen on the community), either from the byass of temper, habit, infirmity of body, or some other cause, indisposing, or disqualifying them for the toils of the Country.
And thus it appears to be one of the attributes to manufactures, and one of no small consequence, to give occasion to the exertion of a greater quantity of Industry, even by the same number of persons, where they happen to prevail, than would exist, if there were no such establishments.
It’s not rocket science.
Greed does not allow for a functioning capitalistic society. Nor does reduced wages or lack of healthcare. Period.
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