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A Majority Of States Are Now Insolvent: Quantifying The Disastrous Unemployment Situation
Update: the Friday, January 29 report was released and our expectations were low: total January Unemployment Insurance Outflows were $14.4 billion, essentially right on top of the December number.
Zero Hedge recently highlighted the ever increasing Federal outlays on unemployment insurance, leading to questions on whether the true unemployment rate, as indicated by actual cash outlays, may be materially higher than indicated in increasingly dubious governmental reports. One proposed alternative has been that the Federal government is directly subsidizing standalone states' depleted unemployment insurance trust funds. Using data provided by ProPublica we have been able to confirm that indeed standalone states are for the most part now bankrupt and have no reserves left in their coffers when it comes to funding ever increasing insurance benefits. As ProPublica indicates, there are now 26 states which have depleted their trust funds, among these are the usual suspects including California, Michigan, New York, Pennsylvania and Ohio, which now rely exclusively on borrowings from the Federal government to prevent the cessation of insurance payments to recently unemployed workers. Currently all states collectively posses $10.7 billion in trust fund assets(with the bulk held by less impacted states such as Washington ($2.6 billion), Louisiana ($1.1 billion) and Oregon ($1.1 billion). On the other hand, 26 states currently rely exclusively on the Federal Government, and have borrowed a combined $30 billion through December to fund payments. ProPublica estimates that another 8 states will be insolvent within 6 months, as their trust funds also approach 0.
The chart below demonstrates the amount of borrowing per state, as well as trust fund holdings.
Another way of visualizing the damage can be seen on the following chart which highlights
The most bankrupt states are California, with $6.8 billion in borrowings, Michigan ($3.4 billion), New York ($2.4 billion), Pennsylvania ($2.2 billion) and Ohio ($1.9 billion).
A chart demonstrating the collapse in California's trust fund, coupled with the relentless increase in the state's unemployment rate, together with Benefits paid out and actual Revenue gained (if any). Note that the April/May tax revenue collection spike, unlike in prior periods, did nothing to boost the trust fund in 2009.
So what is happening on the Federal side of the ledger? Recall that in December the government spent $14.65 billion in Unemployment Insurance Benefits, which was a 24% jump from the $11.8 billion in November. How is January shaping up? Through January 28th, the Federal Government had spent a total of $13.85 billion for this outlay. Once we get the Friday additional data, we will update our previous chart" we expect the final number to be about $14.1 billion, roughly in line with the December total.
At this point there is no question that the vast majority of the hardest hit states now subsist exclusively due to the generosity of the Federal Government, which in turn, courtesy of a 50%+ indirect take down of each and every Treasury auction (now that QE is over), is at the full mercy of foreign investors, yet as we pointed out, their custody holdings at the Fed have started declining. If the government is unable to finance its profligate ways, and today's budget announcement by Obama is just the icing on the cake, look for states to gradually reign in unemployment checks whether they like it or not, which would likely lead to some very interesting demonstrations of the broader population's lack of solidarity with Mr. Blankfein's $100 million, or whatever it may end up being, bonus number. Our advice to California readers who believe they are owed a refund: file your taxes ASAP - the market for IOUs still has to be properly securitized by JP Morgan.
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Its Greece all over the place.
lets smash some White House dinner plates
And then head on over to Finance Street for some more smashing?
Greece is the ward. CalifornikatIOUn.
The % of Greece to the Euro currency is SMALL BEANS as compared to the % the Republik of Kalifornia is to the USA's dollar currency. Then add in other States PLUS their future retirement fund obligations...
so i should get unemployed real quick before i miss out???
Tempting, isn't it.
Unless Congress extends it again (entirely possible)...the cut off for the Fed side of the unemployment funding (not state loans) will end July 31, 2010.
Where is Project Mayhem???
Maybe the killer ukrainian super-flu got him.
+1 LMAO
+111 LOL!!!
Or maybe the black helicopters finally came for him...
I think it was something more along the lines of this:
The black helicopters found his bunker and deliberately released the Ukrainian killer flu bug on him, while the WHO and MSM remain criminally silent in their conspiracy to not report it.
OH LOOK! Lou is back!!
Hi, Lou!!
Seemed like the last time I saw you it was the disinformation you were spreading!
You can't seem to post something without mentioning tin foil or black helicopters. Why dontcha' come up with something original for once!! Or get the Fuck outta here.
WW
Good to be back, and you're still an asshole i see, but i missed you while i was on vacation. BTW, when you become a forum administrator, then you can tell me what to do. Go fuck yourself otherwise.
As for disinformation, you're the one defending the likes of PM, so you are hereby awarded the Goebbels prize for truth in journalism.
+1
My avatar is a disclaimer. But avoid my counsel and pay the price. At least I don't repeat myself every other post.
Well howbout'dat? You've gotten to a point where now you think it's only every other post. Better be careful there W2, next thing you know, you'll be finding yourself agreeing with me on something or other...lol...
Uh. Oklahoma has not had much unemployment yet tax revenue is down so badly that they fussed for weeks about how to save 10 million lousy little dollars to keep from firing several police and fire department people. They could probably actually let about 20 to 30 useless cops go though. So even if unemployment shows gray on these states they got other problems.
I saw a funny news clip where one city was going to spend several million dollars to advertise the need to raise taxes because they didn't have enough money.
Michigan is just a kind of fucked that has never been dealt with by anyone outside of a war zone where you were losing badly.
You ain't kiddin':
http://www.youtube.com/watch?v=n3Rzvn368XQ
Well watched the news tonight. 600 million dollar rainy day fund. 555million of it going goodbye next year. Hoping that things pick up and those numbers won't be so dire but people will re-entrench harder and make that fund go poof.
Great depression II Quit Harder. When your angels come to take you back home. Tell them to get lost. The only way to beat relentless stupidity is through relentless quitting. The one in control remains in control. Till they control nothing.
i am all for getting rid of useless cops and that
begs the question of whether useless cops is
a redundant pair of words.
certainly "oxymoron" makes "redundant pair of words" somewhat redundant
What difference does it make? It all goes on the Federal Government's infinite credit card.
Until the federal credit line gets closed by China. And they aren't happy about the Taiwan development.
Rosetta Stone: So we can say, "Yes, Master" in the appropriate language...
The Federal credit line is the Federal Reserve Bank. Even if the Chinese close their account, the Fed will keep extending credit.
That is how it has worked in every other country.
Until the Arabs shut the oil off.
Haiti has a huge potential for oil. Possibly bigger then Venny with all that unexplored territory with three tec plates constantly shifting underneath.
The Federal Government has a Chinese issue credit card. And purchases earn us reward points on Chinese merchandise.
Is that how the world works?
The Chinese hate it, but our organized crime racket is more powerful than their organized crime racket. We've got world reserve currency status. As long as that's the case, we control the game. We win. That's the way it is. Until it's not, then we're fucked.
I say "we" as if to say we peasants get to participate in the looting. If only it were so... All the peasants can look forward to participating in is getting bent over...
I'm pretty sure that's how the world works.
Were that the credit card actually had an infinite limit...
Off topic but i couldn't resist given your namesake:
<As if that blind rage had washed me clean, rid me of hope; for the first time, in that night alive with signs and stars, I opened myself to the gentle indifference of the world. Finding it so much like myself — so like a brother, really — I felt that I had been happy and that I was happy again. For everything to be consummated, for me to feel less alone, I had only to wish that there be a large crowd of spectators the day of my execution and that they greet me with cries of hatred.>
R.I.P. Albert
Sarkozy should leave him be.
Stranger - Great point.
Uncle Sap - "Another round for all the states. Sure boys, its on me. Hey, Maestro, keep playing the music. I want to hear "Wait til the sun shines Nellie". Louder! Louder!"
Hey mister, could you stake a fellow American to a meal?
It's amazing to me that you can fund 20% of the country's unemployment for less than 5% of tarp outlays. What the f*ck?
Great post. Clear, cutting, and concise.
look at transfer p[ayments in the most recent "personal Income" numbers - up $14B m.m
Where is Project Mayhem? I checked his web-site, and he has'nt made a posting for over a month. Miss his insight.
Or at least his splashy pictures that were vaguely suggestive of some insight.
So do I miss his insight, his cut to the core of political and economic nonsense. This Week in Mayhem was one of the most powerful, courageous layouts of basic truths and clear thinking that we had going for us. Every episode was a brilliant performance!
God help us if Project Mayhem has put aside his keyboard.
Nah just carried away by black helicopters. Not so sure everything was "brilliant". A lot of it was a re-hash of ZH articles and a roundup of info readily available on other sites.
that being said, props for the effort.
He got to Level 3 ID'ing The Reston 6. You have to be a ghost when you get to that level or you don't survive.
(HAARP, boiling water in large underground aquifers, earthquakes for sale).
The famous New Deal opponent Albert Jay Nock wrote that the power of the State increases because of three "principal indexes”:
thank you for this outstanding nugget....i am
unfortunately taking an american history class
where an assigned reading is a hagiography on
the new deal and fdr as though that drum hasn't
been beat into pulverization....
i am currently reading rothbard as an antidote
but now i have some icing on the cake.
Maybe this info will accelerate the "Flight to Safety" to the security of the greenback bunker. LOL...."Flight to Safety"....
An additional thought to those that have not yet
been layed off (or who got laid off and took a
lower paying job and haven't been laid off from
that yet):
Don't factor the availability of unemployment
into your plans. The "states" will have to
"reign in" the outlays. Now that the first
"10%" have received their extended-extended
benefits and depleted the funds, upcoming
first time filers may not be able to obtain
their entitled relief from the UI ponzi.
I disagree. The illusion will be maintained at all costs.
Yah, but taxes are going up...that should help!
My business laid off some people last year, I see the unemployment benefit statements come in and my heart just cringes. I knew these people and what their lifestyles were like. Heard the stories of their kids, yadda, yadda. As a business owner, I always hated paying the taxes, and felt ripped off when I fired some lazy or dishonest SOB, and they got benefits. Now when I see those statements, I am secretly glad that I paid those taxes. It hurts that I can't provide employment for these "good" workers because of the economy. I cringe because I know that based upon the benefits that they are recieving, they must be close to starving. Sad, really sad.
The most bankrupt states are California, with $6.8 billion in borrowings, Michigan ($3.4 billion), New York ($2.4 billion), Pennsylvania ($2.2 billion) and Ohio ($1.9 billion).
States which furnished the most troops for the invasion of the Confederacy:
How do you like your almighty government now?
ZOMG!
Get over it. Do you think the French still complain about role of East Prussians in the loss of Alsace-Lorraine?
They probably do, those goddamnn useless Prussians!
was auch immer, scheissekopf! don't forget that the prussians trained washington's troops at valley forge and was a force multiplier because of that for the colonial troops...
Gott mit uns...
If not for Baron Von Steuben America would almost have certainly lost the revolutionary war and the institution that is the Non-Commissioned Officer Corps of the United States Army would not exist in its current form and function. We agree on that anon being a Dinksbumps!
Tschuss
No more than some French families would complain about the First French Republic.. If they could.
Of course not, because France took Alsace-Lorraine away from Germany after World War II, and France still occupies it.
Of course not, because France took Alsace-Lorraine away from Germany after World War II, and France still occupies it.
That's only because Kali wasn't yet a state back then!
Date California admitted to the Union: Sept. 9, 1850
Yes. It was a mistake invading the South. They would have been America's Mexico, without the threatening skin tone. O well.
More like another Canada, but with more individual liberty. De jure slavery was ending anyway, now we all have debt-peonage slavery to the Wall Street (Yankee) banks, don't we? Even if I don't want to borrow money, the goddamned government borrows it in my name, signs my name on the loan, and sends me a payment book called "Form 1040". It's the new plantation, and you'all don't get it, do you? Think with your brains, and not with your Yankee history books.
One could argue that Canada owes its very existence to the civil war.
Had things happened differently, and British North America remained a forgotten, frozen outpost in the larger British Empire, it's not hard to imagine a scenario where manifest destiny made its way north of the Great Lakes.
(Britain granted Canada nominal independence in 1867 partly in response to the events to the south)
And before that the successful American revolution encouraging many Crown supporting colonists to depart for points north after 1781.
Yes, of course this is true, but the loyalists fled to what was to become British North America; "Canada" as a (nominally) independent country only happened after the civil war.
It's likely Britain would have set Canada loose at some point regardless, but the timing was a result of the civil war (notice that Newfoundland only became part of Canada in 1949)
+10
I think it was the real Bob Marley that said something like "you took the chains from off my feet and placed them on my mind"3
Here, in the midst of the searching of souls and the gnashing of teeth the delegates of this convention, harassed by the rash actions of a belligerent usurper and the radicals of his party have stumbled into cession. God knows I, and many in this chamber have resisted it. But, how can there be union when a section of the country wants to impose its will through coercion? Now that we face the armed might of the United States....
Could have been spoken this very day... The primary differences being that today there is only one political party in the United States and as noted, slavery is now the norm in all 50 states and every other nation that has been sundered and incinerated by the Yankee bankers.
Fuck the Confederacy.
America works best when it says "Union?....YES!"
Yankee public schooling at it's finest.
+10 again SWR. Unions evolve to the end game of the same corruption they are fighting...
Thanks for your thoughts/posts.
I love my country just fine, thank you for asking.
"I'll tell you this
No eternal reward will forgive us now for wasting the dawn" - The Doors
Hey..I thought The Confederacy opened fire on Sumter first!!
You harvest what yo sow...don't you ?
Ah yes...the good ole days....
When men were men....and blacks were 3/5 men....
I am not free from suspicion: I am apt to entertain doubts. I rose yesterday to ask a question which arose in my own mind. When I asked that question, I thought the meaning of my interrogation was obvious. The fate of this question and of America may depend on this. Have they said, We, the states? Have they made a proposal of a compact between states? If they had, this would be a confederation. It is otherwise most clearly a consolidated government.
The question turns, sir, on that poor little thing — the expression, We, the people, instead of the states, of America. I need not take much pains to show that the principles of this system are extremely pernicious, impolitic, and dangerous. Is this a monarchy, like England — a compact between prince and people, with checks on the former to secure the liberty of the latter? Is this a confederacy, like Holland — an association of a number of independent states, each of which retains its individual sovereignty? It is not a democracy, wherein the people retain all their rights securely. Had these principles been adhered to, we should not have been brought to this alarming transition, from a confederacy to a consolidated government. We have no detail of these great consideration, which, in my opinion, ought to have abounded before we should recur to a government of this kind.
Here is a resolution as radical as that which separated us from Great Britain. It is radical in this transition; our rights and privileges are endangered, and the sovereignty of the states will be relinquished: and cannot we plainly see that this is actually the case? The rights of conscience, trial by jury, liberty of the press, all your immunities and franchises, all pretensions to human rights and privileges, are rendered insecure, if not lost, by this change, so loudly talked of by some, and inconsiderately by others. Is this tame relinquishment of rights worthy of freemen? Is it worthy of that manly fortitude that ought to characterize republicans? It is said eight states have adopted this plan. I declare that if twelve states and a half had adopted it, I would, with manly firmness, and in spite of an erring world, reject it.
You are not to inquire how your trade may be increased, nor how you are to become a great and powerful people, but how your liberties can be secured; for liberty ought to be the direct end of your government.
- Patrick Henry, 5 June 1788
Even those who HAVE studied history are doomed to repeat it, when they are surrounded by complete idiots who haven't.
- Me, Today
Excellent!
I honestly thought that you had penned the statement until 2/3 through and I noticed PH at the bottom. This was as excellent as your transistion from Hobbes or Locke (?) to the Declaration of Independence some time ago.
WW - Agreed. Again I stand illuminated and educated from the efforts of SWR.
Too goddamned funny here: this Yankee makes states' rights noises, talks about the federal government overreaching, and early in this vid he says the United States is a "confederated republic."
http://www.youtube.com/watch?v=RB03MEw2_4c&
He can start by apologizing for furnishing troops to invade the sovereign Confederacy, which was founded on the very principles he espouses in his vid.
We did this once before you goddamnable morons. Sam Rohrer, where the hell have you been? In some kind of public school-induced trance?
About the only solution left is to forcibly borrow bank assets and promise to return the assets, er, later
"with the bulk held by less impacted states such as Washington ($2.6 billion), Louisiana ($1.1 billion) and Oregon ($1.1 billion)."
Less impacted by population maybe. Oregon has had some of the worst unemployment during this recession. Rivaling Michigan for awhile. Since this state is a constant fiscal fubar, it's nice to see we're doing better by any measure at this point.
The Geography of a Recession:
http://www.youtube.com/watch?v=G9jBNyysbho
I think this is an appropriate place to break down the Obama "jobs" bill as passed by the House:
Total bill: $174 billion
All said n done, it is just another bailout of the states. Wash, rinse, repeat.
And the only thing that's surprising about this is how spectacularly unsurprising it is.
But I'm sure this "stimulus" bill will work as well as the other "stimulus" bill.
Meaning, of course, that we're totally freaking screwed.
These are the signs of the times: Cities Going Bankrupt (http://crisismaven.wordpress.com/2010/02/01/bloom-of-doom-iii-cities-goi...). By the way, I have just added a Reference List(http://crisismaven.wordpress.com/references/) to my economics blog with economic data series, history, bibliographies etc. for students & researchers.
This mess only gets worse at the local levels in the years to come as real estate gets re-appraised to lower values for tax purposes.
I wonder how people will react to paying 5, 10, 15% of their property's supposed value on an annual basis in property taxes to support bloaded beauracracies.
That is where a major crackdown must occur. There are an absurd number of city and county level employees here in Chicago and Cook County making 75k-200k per year, in jobs that should really be paying 50k-60k. They are horribly over compensated for what they do. A lot of these people are perked out to the max, as well, all on the taxpayer dime (municipal employees with 'corporate credit cards' and expense accounts!).
Not to mention pensions.
I laugh (cry really) when I think of us local private sector stiffs paying taxes into a system chock full of so much bloat that it will never balance itself out without floating more and more bonds.
+100. Public sector excess grew under the radar. Insane growth the past decade. Like a parasite, it is now choking the life out of its malnourished taxpayer host.
The government tail wags the taxpayer dog.
Miami is essentially bust and bankrupt. Yet it agreed to build a 2.5 billion $ baseball stadium for the Marlins. Baseball: a sport that americans no longer play or watch or attend. Is this logical? are we the moron capital of the world?
Stadiums kill me. How about NY/NJ building 3!
The worst has to be a $200 million HIGH SCHOOL in Newton, MA. I think that's Barney Frank's district. A fuckin $200 million high school!
As a former Miamian..y'all get what you deserve. Its like fantasyland down there. My favorite is all the half built skyscrapers and the rich expatriates thinking they can still flip condos.
Does anyone have insight whether or not "carbon offset" is showing as an expense on any of the states budgets?
Imagine the outcry. States can't afford to feed people because the money is going into a scam. Torches and pitchforks would be the least of their problems.
The only reason they are still paying UI is that the 20% of the populace currently unemployed amount to an army larger than the armed forces of the US of A. Were it to become known to a larger extent that 16 million people were going to lose the "lifeline" that is UI, the result would certainly put a crimp, a monkey wrench, a sabo and whatever else they could get their hands on, in the works.
As was so eloquently pointed out earlier, control of the masses by providing federal care for their needs, ensures the continued life of the federal government. If you don't take care of the masses, the masses will take care of you!
"As was so eloquently pointed out earlier, control of the masses by providing federal care for their needs, ensures the continued life of the federal government. If you don't take care of the masses, the masses will take care of you!"
At least until the means to take care of the masses no longer exist.
Not even the Romans could provide bread and circuses forever.
It's fun watching the states get screwed over by their very own bought and paid for fedgub reps. The states are hosed and the congreffcritters couldn't care less. More bankster bailouts baybee!!
"All roads lead to... Detroit."
Couple cities in Kali now have higher unemployment than Detroit.
But they lack the charm.
$ number is becoming irrelevant. Government will just print more money, fiat currencies have no backing therefore constraints. This is just a game of numbers now. How it ends, nobody knows but you may want to pick-up Rosetta Stones Mandarin course just in case.
" I meant "no" constraints".
Red is a good choice for coloring the map, as it is signifies communism.
Finally something California and Texas have in common.
....you mean Texas doesn't have crooked politicians ? :)
Don't fuck with Texas. Out of shape people won't run.
When the checks (or electronic payments) start to arrive late that'll be the cue that there's trouble brewing. Just imagine Uncle Ben as a slow pay!
"Oh no thay dinnit!"
They'll just blame the unemployed for being late paying tax on their UI benefits. Wonder how they're going to pay?
In order to sell QE 2.0 Obama needs a W
No
ugh...that california graph looks just like the heart rate monitor flatlining.
beep...beep...beep...BOOOOOOOOOOOOOP
The way it works is much more cut and dry. Federal unemployment extensions expire at the end of February. Without an act of congress there will be no more unemployment insurance within 6 months, and the majority of benefits will trickle to a standstill within 3 months.
Remember there are more Americans currently on Federal unemployment than on state-cosigned unemployment.
Acts of congress have been progressing as extensions for all states equally, so most likely none of these state budget shortfalls will translate into problems with benefits.
If congress does not act by the end of February, there will be enormous outcry. Republicans will be blamed as the culprits, and the ones in competitive districts will have to show up and vote yes to something for the first time this legislative session.
Federal unemployment will thereupon be extended. Budget shortfalls and deficits have no impact on the legislative process until it is far, far too late.
I agree. If citizens get hungry and homeless, they will seek justice on the ones responsible, and they definitely know whom to blame. So it is especially important for our politicians to feed and house their constituaences by extending unemployment benefits for a while longer. They are riding a large, grumpy tiger.
Greece is the word
It's got groove it's got meaning
Greece is the time, is the place is the motion
Greece is the way we are feeling
Greece is the word
It's got groove it's got meaning
Greece is the time, is the place is the motion
Greece is the way we are feeling
Greece is the word
Is the word
Is the word
Is the word
("turd" may be substituted for "word" at one's discretion)
Great. Remember how CA also started taking 10% more in state income tax from each paycheck? This wasn't considered a raise in taxes because CA would pay it back at the end of the year. Thus, the issue wasn't voted on! So now I'm essentially loaning CA with no choice and no interest earned. I love San Francisco, but this state is retarded, bankrupt, and ridiculous.
Just adjust your withholdings on your W-4 to take home more $$$.
Today's totals - http://www.treasurydirect.gov/govt/reports/tfmp/tfmp_advactivitiessched....
"The harder they come, the harder they fall, one and all." -Peter Tosh
Man, when I think about how much the doelarr is going to get it over the next couple years, then I think about how JPM was issuing IOUs to Kalifornians, and how JPM is issuing the food stamps....wait, JPM is running the money? Hmmm...wait....wow! so they already ran the doelarr into the ground and are already using alternative currencies! boy is the doelarr gonna get it!!! soon! like February 11th.
Another Great Article.. Good Job...Trouble ahead..
Tyler , Good Job... Jobs are hard to find...
It is just going to keep getting worse for all the states. Here is a picture of the problem for Illinois (http://chartfacts.com/chart_frame.php?cid=1676).
Chicago says they are broke. But they built the Bears a free 2 billion$ stadium. That was intelligent. WHy dont they pay for the players salaries also?
Shut up, they probably will end up doing so. Chicago's government is a predator. It exists to extract money from residents and workers people in as many ways as possible, and then redistribute the wealth to those holding the favor of the Daley machine. Think Mafia with lots of lawyers. Whoever called Chicago "the City that works" could not possibly have lived here.
Easter Island part deux.
part deux: The Hatching
sounds like everyone should lock 'n load and hoard gold coins and rice.
so is there a way to use this data to compute the number of unemployed? the answer is yes but i am too lazy to do it or figure it out....
this calculation could probably confirm or contradict the the u-3 number....the fall in income tax receipts could probably confirm u-6....
OBAMA and Bernanke are featured in a movie-- about greedy hedge funds called "Stock Shock." Even though the movie mostly focuses on Sirius XM stock being naked short sold nearly into bankruptcy (5 cents/share), I liked it because it exposes the dark side of Wall Street and revealed some of their secrets. DVD is everywhere but cheaper at www.stockshockmovie.com
The positive comments and do well wishes are very motivational and greatly appreciated.
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