Back in August of this year I did an article that showed how bad the math was with the unemployment system ( Unemployment Benefits – More Math that Just Doesn’t Work/ More Data Hiding? ). Well, the math is just getting worse… back in August the total 2009 outlays had already hit a record but were well under $60 billion. Now they are approaching $100 billion, already almost 5 times the amount paid out in the year 2000:
Charts can be found at the following DOL (Department of Labor) site - ( DOL Chartbook...)
In my prior article on this subject I showed a chart that indicated total program collections ran about $38.77 billion in 2008, a year that $52 billion was spent.
This chart is no longer published on the site! But, I think it's safe to assume that like all tax collections it is probably down at least 15% this year, or will be about $33 billion in revenue with the now $96 billion expenditure, nearly three times the money taken in!
The exhaustion rate of those using they system were already at a record high, but have now risen above half:
The raw number of exhaustions is nearly twice that of the last recession:
When I wrote the original article, I mentioned that there were several data discrepancies and that I had written them asking for an explanation. Nearly two months later I finally got a meaningless acknowledgement, but no real answers, and the data is still missing, particularly in the charts that would normally give insight into the solvency of the funds underlying this program. For example, the chart showing Average High Cost Multiples, a measurement of solvency, has data missing from 1982 and 1983 (high draw years), and now they will not show the data since 2006:
In addition to missing data, some of the chart series I presented in that article are now missing entirely, like the chart showing Total Contributions collected, the program’s income (I’m sure it has collapsed).
The Treasury holds the Unemployment Trust fund and lends money to states that fall short in their own individual funds. More and more states are falling into the red and borrowing from the Treasury to keep unemployment payments going. So many loans were made last year that the net borrowings and claims exceeded the amount taken in – negative net cash flow.
How good is DOL at forecasting? Here's a quote from their 2008 mid year review, "Outlays from state trust fund accounts are projected to exceed revenues and interest income by $2.48 billion in FY 2008 and $4.93 billion in FY 2009."
Nice guess, they are only off by about $55 billion, or 1,100% on their '09 estimate made only six months prior to the beginning of the year, Oops. The following report included this fine update, "Summary: That statistic unexpectedly declined sharply, suggesting that the economic assumptions may be somewhat optimistic. Outlays from state trust fund accounts are projected to exceed revenues and interest income by $29.0 billion in FY 2009 and $21.1 billion in FY 2010. The general fund advances must be repaid with interest."
Uh huh... still not even close to reality.
The DOL, the BLS, and all government agencies that report statistics need to be torn down and a new agency implemented with a well defined mission of transparency, independence, and consistency over time. Just like the Fed and Treasury (who holds these unemployment accounts), if they have nothing to hide, why don’t they just provide the data?
It’s because they do have something to hide, the fund is insolvent – make me happy, prove me wrong. I say audit the Treasury (a real and meaningful audit) and the Unemployment Trust Fund while you’re auditing the Fed!
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