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Monday, November 8, 2010

State of California Borrowing $40 Million a Day to pay Unemployment Insurance

California State Capitol, SacramentoImage via Wikipedia
The state of California is paying out
up to $40 Million Dollars
a day in Unemployment Benefits
California has been borrowing tens of millions of dollars each day from the federal government to pay for unemployment insurance, according to an article published today on TheEpochTimes.com.

In addition, Los Angeles Times reported on November 6, that with the unemployment rate sitting at 12% in California, the state has been paying out about $40 million a day in unemployment benefits to job seekers, in one of the nation largest states. Reports have found that interest on the debt is starting to accumulate, and California will have to pay $362 million to the government by the end of September 2011.

California already owes the federal government $8.6 billion for jobless insurance payments; which is expected to increase to $10 billion by the end of 2010.

The state took out its first loan out in early 2009. It has now topped the list of the states that owe the federal government the most money for unemployment insurance.

Last week during midterm elections, California passed Proposition 25, will allows the state legislature to pass a budget with a majority rule. The Times reports that the deficit going to reach $13.4 billion by next year.


What are your thoughts on this article? Will California face go broke providing much needed unemployment benefits to its' millions of jobless residents? Feel free to comment on this story below!
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