Tax Rebate Loans Can Better Aid the Unemployed
The Covid-19 pandemic drew attention to America’s ramshackle system of Unemployment Insurance. As the number of claimants surged from 2 million in February to 21 million in May 2020, a third of benefits were not paid, as antiquated computer systems left many states unable to process applications. And today, the federal Government Accountability Office found that “fraudsters may have stolen $1 of every $7 in covid jobless aid,” that is, over $135 billion.
Even if it functioned as intended, America’s 87-year-old UI system is poorly suited to the modern economy. It provides meager support to workers who most need help, entirely excludes those at greatest risk of being laid off, and mostly distributes aid to households who have little need for assistance.
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