California Borrowing $40 Million a Day from Feds for Unemployment Benefits

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Underscoring the dire state of affairs in the State of California’s treasury, the state is borrowing $40 million every day from the federal government to pay for the approximately one in eight workers in the state without a job. Currently at $8.6 billion, the debt is expected to hit $13.4 billion by the end of 2011 and $16 billion by the end of 2012.

California’s lawmakers have struggled in recent years to agree on a budget, while furiously cutting back programs enacted when times were good. This year, the budget was a record 100 days late and the state had to issue IOU’s to keep the state running. This year’s $19 billion gap was closed recently using a combination of accounting tricks, expectations of a better economy and hopes that the feds will come to the rescue.

Los Angeles Times

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