California has defaulted on an Emergency Unemployment Insurance Loan from the federal Government and employers in the state are getting Bills for $15,000 or more to cover the state's bad debt!
If only it were just an earthquake. We could then just repair some damaged roadways or condemn a couple dozen buildings, then resume our lives. Maybe the Bay Bridge would need a section reattached. Or the last letter "D" in Hollywood would tip over. We'd send over some lumber reinforcements. No problem. This tragedy, however, has no asphalt-rending fault lines, except the ones in government, where the fault lies.
We would like to direct your attention to something boring but infinitely informative regarding the nature of this mismanaged state. Employers who utilize labor, pay into the FUTA, or the federal unemployment tax, at a rate of 6% and are credited back an offset of 5.4% that they previously paid the state, leaving a small federal liability of only 0.6%.
However, if the state-run Uemployment Insurance (U.I.) trust gets overdrawn, as it did in California for going on its third year now, it automatically pulls an emergency loan out from the federal government to service the underfunded account. And if that is not repaid by November 10, and it defaults, then the government forces employers to pay it.
They just defaulted. Companies began receiving a mystery bill in the mail two weeks ago, explaining their new $15,000 owed. This was a shock, as it was not expected. It is now becoming clear that many employers won't be able to pay it, especially considering how much the minimum wage hikes, the new mandatory paid sick leave, and Obamacare have impaired cash reserves.
To appreciate what is going on in the lousy 14K Golden Alloy State, we need to connect a few moving pieces that the lying-mass-media won't report on. First, why is U.I. getting robbed when the Bureau of Labor Statistics (BLS) has said this is such a great jobs economic recovery? California, one of the most populous states, has a 6.3% Unemployment Rate (U.R.). The national average for the rest of the country is 4.7%. Ignore that both numbers are a lie and shadow stats have them both well north of that, but why is California's percentage higher?
California is a sanctuary state, a rogue state, mining votes openly from the southern border in exchange for welfare benefits but also for under-the-table Home Depot cash jobs. It is indeed a "depot" station, but not one visa overstay violator will ever be deported here or asked for authenticating ID. Few Immigration and Customs Enforcement (ICE) officers in the state have walked onto a hardware store parking lot looking for violators – and why would they? To be harassed by Jerry Brown's free legal advice now given to illegal aliens, paid for by the taxpayer?
California's U.I. trust is being kneecapped because of arms-wide-open amnesty that is removing jobs from those born here, and thus sending the U.I. rate ever higher. And the employer is the fall guy politicians will use to force you to buy votes for them. Isn't helping a Democrat hold on to power using your taxes great?
Politicians are inviting hordes of illegals, unvetted, infected with TB, and, like A Clockwork Orange, you, civilian, must sit in that chair squirming, getting the needles placed under your skin, because don't you realize how important it is to get Democrats elected. So sit in the chair and take it. Jerry Brown has important things to get done that don't involve you. Never have.
And so, with record-low interest rates now going on our ninth year and federal debt that could reach Saturn's rings and back, the real fault lines will be seen first emerging in the states, since they can't print their own money, unlike the feds.
California is the first one to emerge with fiscal cracks invading the farcical narratives of Hopeychangey Land. It won't be the San Andreas that swallows California whole, or causes us to drift off the coast. It will be more and more little things like an employer tearing open a tax bill and seeing an entirely new line item that never existed before. And the business asking why they continue to remain behind the Democratic Party's cocky supermajority iron curtain. And, as the seismic plates shift in their mind as they ask that question and it later moves under their feet, mobilizing them, then a Randian exodus out to healthier, less shaky, more stable state economies, where businesses will be respected, maybe even wanted, and not used like a kicked vending machine for extra change in the coin slot every time they run out of other people's money to buy votes from border-crashers.
Some businesses will stay waiting for the Big One. Then perhaps FEMA can step in and slap all of its fresh printed digital mint across the barren land in an equal exchange of debt for debt. Problem solved.