Profligate states to be continually bailed out by the federal government and its wonderful money-printing machine:
The Obama administration is proposing short-term relief to states saddled with unemployment insurance debt, coupled with a delayed increase in the income level used to tax employers for the aid to the jobless.
The administration plans to include the proposal in its budget plan next week. The plan was confirmed to Fox News late Monday by a person familiar with the discussions on the condition of anonymity because the budget plan is still being completed.
Rising unemployment has placed such a burden on states that 30 of them owe the federal government $42 billion in money borrowed to meet their unemployment insurance obligations. Three states already have had to raise taxes to begin paying back the money they owe. More than 20 other states likely would have to raise taxes to cover their unemployment insurance debts. Under federal law, such tax increases are automatic once the money owed reaches a certain level.
So the Obama Administration keeps the Ponzi economy going by handing out borrowed money to everyone unemployed for two years. And then when the economy is allegedly in recovery and it's time to start paying back the "borrowed" funds, wait a minute! Let's not do anything rash!
This is nothing more than another round of state bailouts -- with the biggest bailouts going to the most irresponsible states. And guess what? We keep borrowing and spending and pretending everything is OK through the next election. And then the bill comes due only after Obama has been re-elected.
Under the proposal, the administration would impose a moratorium in 2011 and 2012 on state tax increases and on state interest payments on the debt.