XPost: alt.california, alt.fan.rush-limbaugh, alt.society.liberalism   
   XPost: talk.politics.guns   
   From: unqualified.black.cunt@splcenter.org   
      
   On 18 Sep 2021, Rudy Canoza  posted some   
   news:t1u1J.18748$PE4.2069@fx11.iad:   
      
   > I flunked economics.   
      
   Little did California businesses know that they were cosigners on the   
   state’s nearly $20 billion loan from the federal government that was used   
   to cover California’s unemployment fund shortfall during the COVID   
   pandemic. This ugly truth became apparent when the state recently decided   
   to stop making payments on this loan.   
      
   Little did California businesses know that they were cosigners on the   
   state’s nearly $20 billion loan from the federal government that was used   
   to cover California’s unemployment fund shortfall during the COVID   
   pandemic. This ugly truth became apparent when the state recently decided   
   to stop making payments on this loan. When a state defaults on its federal   
   unemployment insurance loan, federal law requires that the state’s   
   businesses repay the loan.   
   What makes this default even more egregious is that the stone-age-era IT   
   system of the state’s Employment and Development Department (EDD) opened   
   the floodgates to bad actors, permitting more than $30 billion in   
   fraudulent unemployment claims during the pandemic. Those receiving   
   fraudulent payments include incarcerated felons, a person impersonating a   
   one-year-old, and a person impersonating Senator Dianne Feinstein. A   
   single residential address received checks for around 60 separate   
   individuals filing from that address.   
      
   This could have been avoided with a competent EDD. But this department’s   
   performance has been deficient for decades, and California businesses,   
   many of which are struggling, are left paying for blatant and costly   
   mistakes that should and could have been solved years ago.   
      
   With an unpaid federal unemployment insurance loan, the federal government   
   raises the unemployment insurance tax immediately by 0.3 percent on each   
   business within the state, and an additional 0.3 percent each year after   
   that until the loan is fully repaid. The normal federal unemployment   
   insurance tax rate is 0.6 percent per year, which means that California   
   businesses will be paying several multiples of the normal federal tax rate   
   before the loan is retired.   
      
   The state’s Legislative Analyst Office predicts that repaying the loan   
   through higher taxes on businesses is not expected until 2029 or 2030 and   
   note that retiring the debt could take longer, depending on the state’s   
   economic performance. A recession would almost certainly delay repayment,   
   and the odds of a recession in the next seven years are significant.   
      
   The state’s decision to default is inexcusable. California recorded a   
   nearly $100 billion state budget surplus last year, thanks to the state’s   
   top earners, that could have been used to repay the debt. The state   
   received $27 billion in federal COVID aid it could have used to repay the   
   debt. The state’s record $300 billion–plus 2022–23 budget could have   
   retired the debt. Even after defaulting, the state could have resumed its   
   payments this year and offset the tax burden on businesses, as it planned   
   to do in its 2023–24 budget. But as the state’s finances continue to   
   decline, the state has walked back making payments or offsetting higher   
   business federal unemployment insurance taxes.   
      
   Twenty-two states received federal unemployment loans during the pandemic,   
   and California is just one of four states that have not yet repaid the   
   debt. As of the end of last year, California owed nearly two-thirds of the   
   outstanding $27.5 billion federal unemployment insurance debt among these   
   four states. The other states with remaining unpaid debt are New York,   
   Illinois, and Connecticut, all of which are high-tax and high-spending   
   states that are all losing population to other states. I will let you draw   
   your own inferences about why people are leaving California and these   
   other three states and moving to states with lower taxes, fewer   
   regulations, more economic freedom, and lower living costs.   
      
   The EDD’s IT system is from the 1980s and runs software that is more than   
   50 years old. For decades, the department’s IT people tried to patch the   
      
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