33 States SOL for Unemployment Benefits

33 states lack the capital to support jobless benefits, possibly the worst news since the recession hit. These states, including our own California, have borrowed massive amounts of money in order to fund benefits.

Money for jobless benefits are created when the government collects a small tax from employers on their employee's wages. CNN reporter Hibah Yousuf stated yesterday that "while total wages and weekly jobless benefit levels have been rising, governments haven't increased the taxable base wages at the same pace." This presents a bittersweet conclusion: unemployment benefits are rising (good); we don't have the money to pay for them (bad).

Yousuf writes that the government has caused this lack of money for benefits by using a "pay as you go" strategy. During strong economic times, the feds keep taxes and funds at a low level; during weak times (like right now), the government raises taxes and slashes benefits. It is no surprise that the mere 13 states who do have sufficient unemployment-designated funds did not use this strategy.

Andrew Stettner, deputy director of the National Employment Law Project, makes the obvious and necessary conclusion: "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."

Stay positive, nation.