Many States Feeling the Economic Pressure
Unemployment Funds Decreasing Rapidly
Those who are unemployed are not the only people facing difficulties while looking to borrow money. States providing unemployment benefits are quickly running out of cash and are looking at the government for loans to bail them out. The Washington Post reports that 40 state programs will need $90 billion in loans to keep unemployment checks going out to people. This is completely a direct fall out of the recession, which will force the governments to either slash benefits or raise taxes.
Too Much Stress on the States
Many states that are the hardest hit with the massive wave of unemployment are now feeling the stress of not enough money to pay out. This is expected to get worse over the coming two years as 25 states have already borrowed $24 billion, with these figures expected to reach $90 billion borrowed from over 40 states by the year 2011. The effect that this will have on the economy can only be imagined, but it seems that it may only get worse. Some states that are under immense stress are already talking about tax raises and cuts in unemployment benefits.
Is there Hope for the Unemployed?
For the hundreds of people who are unemployed, this may only get worse. The lack of jobs and the rise of inflation will send people into taking actions they wouldn’t normally do, including incurring debts from credit cards, short term loans and even delayed payments of utilities and mortgages in the hope that conditions will improve. Even for people with jobs, this news will be something that is not welcome on the eve of a new year, as they may have had to borrow money to make ends meet. If additional stress is created by the government, they will be left with little choices than to start abnormal activities as well, just to survive.
Better Jobs, Better Economy
Creating jobs is easier said than done. Making tall promises with no back up plans may come easily to most politicians, but convincing companies to adhere to their promises is the difficult part of creating a better economy for all. Blame can easily be transferred to companies that have outsourced jobs to developing countries, but asking them to close down their overseas operations and return back to the country will not be enough. Companies will not want to return to pay higher production costs compared to their currently outsourced operations. And, if they were to do this, then prices will be raised even more just to cover their operation costs. Tax cuts that were announced seem to have little effect on them, and the government will need to come out with a plan to ensure that jobs stay in the United States by offering companies more than just tax cuts.
The Future – not a promising outlook
The public will be facing the worst of the coming years from rising taxes, lower benefit payments, and the growing need to borrow more money from any available sources in order to stay afloat. Sooner or later they will fail, unless drastic measures are taken to improve the economic situation.