Cheshire Cat Photo Blog(...said the Cat: 'we're all mad here....')

California is borrowing $40 million a day from the federal government to provide assistance to jobless workers. The fund for paying California’s unemployment insurance is broke, and ONE in every EIGHT workers is unemployed!

Another unintended consequence for short-sighted businesses that off-shored jobs and laid off workers in California is that employers face an automatic hike in their federal unemployment insurance taxes, which will increase payroll costs by $21 a year for each employee. Those costs may more than double over the next five years, if California continues to borrow from the federal government. Business, of course, has been opposing any type of tax increase, saying that a tax increase will result in fewer jobs being created.

Since most of the jobs created lately have been overseas anyway, workers probably shouldn’t care! Money given to corporations has found its way overseas or has been invested without domestic job creation. “Greedy AND stupid” is probably not a good way to go through life! (… to paraphrase “Animal House.”)

The state’s debt is now at $8.6 billion and is expected to reach $10.3 billion for the year, 2/3 greater than last year. By the end of NEXT year, the deficit is projected to reach $13.4 billion and $16 billion in 2012, according to California’s Employment Development Department (EDD).

Interest on that debt means a $362 million payment to the federal government next September, which is money that would otherwise go into the state’s general fund.

As for California’s dysfunctional legislature, Republicans do not want to raise taxes and Democrats do not want to cut benefits.

The LA Times online article offers a number of approaches, but real solutions will likely involve compromise, something that has been alien to Sacramento in the past.

-Bill at

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