Unemployment

[kandrathe]

Not really, no. But does this actually come back to unemployment somehow?

Indirectly. Unemployment leads to a 20% loss of revenue both in income tax and corporate profits from consumption, which means a greater share of deficit spending to sustain the federal budget. In a way, it all leads back to the bubble, which in its last incarnation was a product of reckless lending and packaging debt into derivatives (junk bonds). The origin of the bubble... Now that gets to the real economic war.

States are screwed, since they can't print their own money, or build their budgets on sustained borrowing for that matter. States, like Florida, are doing ok, because they don't have an income tax, only sales tax and property tax. This is why Congress is so very keen to pass the "Jobs" bill now, in which they can slip in the 2010 $200 billion bail out of the states, just as they hid the 2009 $200 billion bail out of the states in the "Stimulus" bill. In that regard, the only jobs saved by the stimulus bill were public sector jobs. If the feds stop sending the states money, then they also will need to trim their budgets to fit their revenues. Residents of non-bailout states should be outraged that they will be taxed to pay for the fiscal mismanagement of certain states(i.e. California).