California Defaults on $18.6 Billion Debt, Makes Businesses Pay
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Gov. Newson borrowed about $20 billion from the Federal government during the Pandemic to pay unemployment benefits. Newsom’s lockdowns are the reason for the unemployment. Nonetheless, he has decided not to pay $18.6 Billion, leaving employers to pay the bill. He’s also asked the federal government to pay, passing his debt and his mistakes to every American taxpayer.
He can do that based on federal law.
California is a very unfriendly state for business.
“The state should have taken care of the loans with the COVID money it received from the government in 2021,” Marc Joffe, policy analyst at the Cato Institute—a public policy think tank headquartered in Washington, D.C.—told Epoch Times.
The federal unemployment tax rate of .6 percent is set to increase by .3 percent annually, starting in 2023, until the loan is extinguished.
“California is just not really an employer-friendly state,” said Joffe. “This one thing will not be a difference between a business remaining open or closing, but it’s just another burden on top of the many burdens the state puts on employers.”
This year’s budget had $750million to begin paying it off, but Newsom nixed it.
According to the Epoch Times, fraud it making [causing?] the situation worse. Analytics firm LexisNexis estimated the total cost of the fraud at $32.6 billion.
Investigations have since uncovered that illegitimate unemployment benefits payments were paid to convicted felons, with one address receiving 60 separate fraudulent payments.
The state started to upgrade their software, but that stopped in 2016 due to cost. They didn’t want to pay the $14 million to operate the system dealing with fraud so now they pay out billions in fraud, or rather the businesses will pay.
The state is seeking forgiveness from the Biden Regime so everyone can pay for another bad decision under Newsom’s leadership. The businesses and all American Taxpayers can pay for the inept Mr. Newsom.
Don’t open a business in California and don’t buy their municipal bonds! Progressives have taken this beautiful state and turned it into a homeless migrant shelter as they give billions away to crooks.