33 States Out Of Money For Jobless Benefits

Things don't look good!

"A total of 33 states and the Virgin Islands have depleted their funds and borrowed more than $38.7 billion"...

Thirty-three states have been relying on the federal government to pay the jobless benefits. But, the CONgress just extended benefits for the unemployed and the President signed it which extended it, through Memorial Day 2010. Now this is an additional $18 billion which we don't have, but I guess we can print some more. How many times will CONgress extend these benefits? As sad as it may seem, we need to stop these payments and let people start working.

"The nation's financing system for jobless benefits is under unprecedented stress," said Andrew Stettner, deputy director of the New York-based advocacy group for the unemployed.

I would say this is an understatement. The article mentions that at the beginning of the recession only 19 states had the recommended level of funding.

"The current crisis should compel policy makers to forge a new path to forward financing of the unemployment insurance program," Stettner said. "As the broke funds of 33 states makes clear, unemployment insurance reserves need to be stocked up before recessions hit so that states are prepared."

Unemployment insurance is paid by employers. If the employers costs increase, these costs will be passed on to the customers through higher prices. Higher prices means inflation. Get prepared.