$37.8 Billion Borrowed From Treasury To Fund Unemployment; CA, MI, NY Worst

By Tyler Durdin

Zero Hedge

“In 2009, the State of North Dakota does not have any funding issues at all. We, in fact, are dealing with the largest surplus we’ve ever had.” Eric Hardmeyer, president of the state-owned Bank of North Dakota.

Courtesy of Economic Policy Journal we now know that the majority of American states are currently insolvent, and that the US Treasury has been conducting a shadow bailout of at least 32 US states. Over 60% of Americans receiving state unemployment benefits are getting these directly from the US government, as 32 states have now borrowed $37.8 billion from Uncle Sam to fund unemployment insurance.

The states in most dire condition, not unexpectedly, are the unholy trifecta of California ($6.9 billion borrowed), Michigan ($3.9 billion), and New York ($3.2 billion). With this form of shadow bailout occurring, one can only wonder how many other shadow programs are currently in operation to fund states under the table with federal money.The full list of America’s 32 insolvent states is below, sorted in order of bankruptedness, in millions of dollars.

California $6,900 Michigan 3,900 New York 3,200 Penn. 3,000 Ohio 2,300 Illinois 2,200 North Carolina 2,100 Indiana 1,700 New Jersey 1,700 Florida 1,600 Wisconsin 1,400 Texas 1,000 South Carolina 886 Kentucky 795 Missouri 722 Connecticut 498 Minnesota 477 Georgia 416 Nevada 397 Massachusetts 387 Virginia 346 Arkansas 330 Alabama 283 Colorado 253 Rhode Island 225 Idaho 202 Maryland 133 Kansas 88 Vermont 33 South Dakota 24 Tennessee 21 Virgin Islands 13 Delaware 12