New York State’s unemployment insurance system, besieged by claims from laid-off workers, ran out of money on the first business day of the year and is borrowing daily from the federal government to bridge a fast-growing and potentially huge deficit, state labor officials say.
Despite paying lower benefits to its jobless residents than other Northeastern states, the state’s unemployment fund has been borrowing about $90 million a week from the federal unemployment trust fund, state officials said. The deficit has already reached $212 million and is expected to exceed $2.5 billion by the end of 2010, they said.
Those loans could wind up costing the state’s unemployment fund more than $100 million in interest and could result in a punitive tax on all employers across the state two years from now, state officials and experts on the unemployment insurance system said.
More than 500,000 people were collecting unemployment checks in New York State in the first week of this year, nearly three times as many as a year before.
"It's up to you New York, New York!!!" Sorry, I am back... unemployment benefits being paid to 3X the number of New Yorkers as last year does not tell the whole story. Many of these jobs were BIG PAYING jobs on Wall Street. They ain't coming back.
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The state is spending so much money that Governor Schwarzenegger could fire every single California civil servant and still not come close to balancing the budget! Even if he also fired the other 149,000 legislative aides and people who work for the state’s courts or university systems (people not directly under the state’s control), he still couldn’t eliminate the deficit.
California's, San Francisco politico's - populist appearing but really communists in drag - have doomed California. They were cool, hip, and politically correct. Math skills? Not so much.
If Gov. Arnold Schwarzenegger were to fire every employee in state government tomorrow, it would easily patch California's enormous deficit, right? Not even close.
But surely shutting down all state prisons would do the trick? That, too, would only get him about a quarter of the way there.
Now what if he were to close every prison and cut off funding for health care and other services for the poor? Now we're in the ballpark.
Schwarzenegger on Thursday delivered his annual State of the State address, and there was only one topic on his mind: A budget deficit that's ballooned to $40 billion through mid-2010.
How does the average taxpayer begin to make sense of that sum? Not easily.
"It's like a number that's out there, but it's so big that it almost becomes meaningless," said Adrienne Gates, a 50-year-old San Jose resident who keeps fairly close tabs on news out of Sacramento. "It's like hearing stories about how fast the universe is expanding."
Now just keep in mind that the intellectual scions of the California socialist movements are the folks at the controls of the train set in the U.S. Congress and Senate (I will reserve judgment on the new president with whom I have been happily stunned and surprised - still he has yet to actually govern anything...).
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It is the same story everywhere: Previous state and local politicians made promises to unions that simply cannot be delivered upon. Whether it is Ohio, or Michigan, New York, or California, the pension system, particularly at the state and municipal level, just ain't gonna be able to pay out as promised. To make matters worse, our system encourages litigation and political profiteering to "solve" issues like this, further draining resources from the system.
The U.S. has FAR TOO MANY LAWYERS (and far too many people working in Finance, Insurance, and Real Estate) (and I have nothing against lawyers - much as it pains me to admit it, some of my best friends are lawyers). Unfortunately, these folks are not going to "go quietly into that good night", and this activity is going to be a net negative for the economy. By economic necessity these folks will result to extortionist activities - I mean they are lawyers, right? They paid a lot of money to go to Law School. They have no other means of making a living given the economy.
In the past, each business cycle recession ended, and life went on as it had for most of the post-War era. Things are different this cycle, in my humble opinion. At the end of this recession lies an energy crisis unlike anything we have had to contend with, ergo, there will be no recovery in the conventional sense. Certain groups are better positioned to force feed their agenda than others: Police, prison guards, lawyers, teachers, nurses, etc... in short, with the exception of lawyers, municipal union workers. Each special interest group will not concern itself with the issues facing the rest of the population.
The municipal unions WILL sink the various states, cities, and counties. The efforts of the U.S. excess lawyer population will be tremendous drag on commercial activity. Police will want to put as many people into the system as possible. Hell, firemen might even start a couple of fires.
You get the idea.
Good luck!
Mentatt (at) yahoo (dot) com
5 comments:
Sadly, NO-ONE is talking about balancing budgets anymore. I always thought one of the fundamentals of any economy (including one's personal economy) is that you only borrow to invest in something that will make a greater profit. So Obama rebuilding infrastructure may be good; education, healthcare, railways,etc (we can argue about roads and car plants!,)but giving people money for nothing; unemployment, underwater mortgages, gamblers, sorry I mean bankers rescue, is just good money after bad. The bubble has burst, no point trying to go back there.
Perhaps the new bubble will be government spending?
When I hear healthcare and education spending in the stimulus package I FU%$#ing cringe!!!
Stop with the socialist bullsh-t already! The funds for "education" will only go to further the agenda of the freaking NEA. ANd "Healthcare"? It won't be spent on children, because kids don't vote. "Healthcare" monies will be spent on the dubious purpose of keeping terminally ill people alive for a few more days - at great expense to everyone EXCEPT the recipient.
The U.S. needs a lot of things.
A tree planting program, improved waterways, electric rail, alternative energy... things you can measure. That is why government won't do them. They HATE things that can be measured, favoring abstracts that will get them through to the next election.
I think you are both going on a rant tangeant again. :) If the nation didn't need any more lawyers, more kids wouldn't be going to law school. But someone must be hiring them. When the salaries for doctors started to level out due to insurance companies and government payments becoming more restrained, the number of people going to medical school decreased. There appears to be a BIG problem with the family doctor/general medicine/primary care giver field, because there are not enough doctors available to do family/general medicine. Have faith in the capitalist system! :) If there is no one to hire more lawyers, there will be fewer lawyers.
Greg
I mean real education; maths, English (yeah, I know you guys have a problem with that), science (no, your god DIDN'T make the earth in 6 days). I don't mean hairdressing, nail-decorating, crime scene investigation and Miami Law. All worth about the same.
And healthcare is about genuinely sick people getting healthy so they can get back to work, not $300,000 'specialists' and people 'sick' only because they weigh 500 lbs!
And for Bureaucrat; the market doesn' t ALWAYS work because the very existence of government distorts it. Also, read your Marx (not, don't assume you know what he means, read it!); the market results in the rich getting richer until the market system collapses and the state HAS to rescue it. Sound familiar?
One of the basic problems with faith in the capitalist system is that there is a huge lag time with "market forces" solutions. Kids aspiring to be lawyers today won't discover there is no market for same until after they've graduated. What a waste of time and resources.
The temporal lag between the appearance of a market "signal" and a development cycle solution to it is often years....a business model is constructed, funding/investors sought, employees hired, product developed, factory built, advertising and marketing put together, distribution channels found, product manufactured an finally delivered....by which time the market may have changed.
The other fundamental problem is the one addressed by Dmitry Orlov here
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