The following chart from Stateline will be quite critical to evaluate going forward as states increasingly ponder just how to tweak their revenue formulas in order to not only get away from the precipice of insolvency, but to pay back the tens of billions borrowed from the Federal government to fund unemployment pay.
And as for the abovementioned borrowings to fund unemployment insurance payments, the Post and Courier has the following story highlighting that not only are states in the red, they also have a $31 billion hold to repay to Uncle Sam.
South Carolina and other cash-strapped states borrowed a total of about $31 billion from the federal government over the last two years to provide their unemployed workers with benefit checks, and now as the country climbs out of recession the states must find a way to pay it back.
John Rainey, South Carolina's chief economic adviser, said the state needs to take calculated steps to repay its $800 million debt while some others hold out hope that the federal government will forgive the loans.
Odd: taking a note from Wall Street, these states can not be that stupid to think they won't be able to get some sort of concession or outright forgiveness of all this debt? Sure enough:
South Carolina does not yet have a plan to pay back the money.
U.S. House Majority Whip Jim Clyburn, D-S.C., said it is too early to talk about forgiving the debt, but he and other Congressmen are studying ways to address the issue.
U.S. Sen. Lindsey Graham, R-S.C., had not taken a public stance on the matter so far, but his office said the senator will work with state officials to make sure South Carolina is treated fairly and equitably in whatever action the federal government may take.
State Sen. Greg Ryberg, R-Aiken, said he would support a decision by the federal government to forgive the debt, but it is the state's responsibility in the meantime come up with a plan to pay it back.
And once the debt forgiveness migrates to the state level, we are confident that consumers will be next. After all, all is fair in love and currency devaluation.