From Yahoo News –

State officials had plenty of warning. Over the past three decades, two national commissions and a series of government audits sounded alarms about the dwindling amount of money states were setting aside to pay unemployment insurance to laid-off workers.

“Trust Fund Reserves Inadequate,” federal auditors said in a 1988 report.

It’s clear now the warnings were pretty much ignored. Instead, states kept whittling away at the trust funds, mostly by cutting unemployment insurance taxes at the behest of the business community. The low balances hastened insolvency when the recession hit, leading about 30 states to borrow $41.5 billion from the federal government to pay unemployment benefits to their growing population of jobless.

Here is some of the reasoning applied to keeping proper reserves –

“If you look at it from the employers’ standpoint, they’re not going to want reserves to build up excessively high because then there’s an increasing risk that advocates for benefit expansion would point to the high reserves and say, ‘We can afford to increase benefits,'” said Rich Hobbie, executive director of the National Association of State Workforce Agencies.

States also diverted the funds to other uses but the main reason for the lack of reserves is tax cuts demanded by business.

Tax cuts do not solve all problems. Sometimes, I think considering the current political philosophy, if the United States were to be invaded, Congress would provide a tax credit for every enemy killed, every home fortified and every gun purchased and then just leave it at that.

What is it about the phrase, safety net, that people just don’t get? Economic catastrophes happen. Volcanoes and hurricanes happen. People become ill. People become incapacitated. Manufacturing plants move to Guatemala. You provide American citizens with economic resources to keep going until the situation can be resolved, until they can get back on their feet.

The unemployment safety net has been funded inadequately for about twenty years.

But I understand the problem.

There isn’t one, not in the minds of the people who matter, those with influence at the state capital.

These people, these unemployed, are not important. It does not matter whether the programs are funded or not. As long as business has more money to invest, as long as profits are protected for the private sector, there is no problem.

There is no problem now, when the situation becomes difficult, you borrow from the feds, cut benefits or cut anything else necessary. It does not matter whether the state has a fiscal crisis. It does not matter as long as the profits are good.

It is more important to have low taxes than to take care of fellow citizens.

Neither the unemployed or fiscal responsibility have a lobby.

Profits are important. It is a more critical value than patriotism, than religion or duty to fulfill one’s obligations.

The unemployed are not important. They have no influence. They have no money.

And their votes are swallowed up on political campaigns dominated by huge campaign contributions.

They have nowhere to go.

James Pilant